Doyon plans to drill another oil and gas exploration well in the Nenana area. It will be the third the company has sunk into the oil and gas-rich basin. The Interior Regional Native Corporation is looking for a commercially developable deposit to supply local and broader energy demand.
Doyon CEO Aaron Schutt announced the new exploration well project at a press conference at the corporation’s Fairbanks headquarters.
“Last winter we ran an extensive 3D seismic program just west of the community of Nenana — about 50 square miles — to process the data. (We) got recommendations on next steps, and we’re very excited to announce the well.”
Schutt says the drilling, planned for next summer on land leased from the state about 7 miles west of Nenena, is between the 2 earlier Doyon explorations wells. The new well is being named after the Nenena Village Corporation: Toghotthele which draws its moniker from a local hill, something Doyon Board Chairman Orie Williams believes may benefit the project.
“Chief Peter John used to say that mountains are just something floating in the distance. And back in the old time days when they traveled the rivers they could see that Toghotthele hill floating out in the distance — a good place to camp. That was a major landmark, so there will be some spirituality to this well and some good luck coming with it.”
Doyon and other companies have explored the Nenana Basin for decades, but have yet to find a commercially viable oil and gas deposit. Schutt says geology at the latest drill site looks promising.
“Looking at the structure in this location, we’re very, very optimistic. And you can see that we and our experts in particular put a one in two chance of a produceable gas field in this next well.”
Schutt says natural gas from the project could serve the local area and other parts of the state, noting Nenana’s location along the Tanana River, on which gas could be barged to villages. Schutt won’t put a price tag on the project, but says state of Alaska oil and gas exploration tax credits are instrumental in pursuing it.
“Wild cat exploration is not for the faint of heart, and the state’s program is certainly a big part of Doyon’s efforts in the Nenana-Minto basin.”
Citing the state’s budget deficit, earlier this summer, Governor Walker cut $200 million in oil industry tax credits from the state budget, leaving another $500 million in tact. State Representative Steve Thompson says the cut hurts smaller energy company projects.
Representative Thompson of Fairbanks says the credits are paid out on a first come first serve basis.