FAIRBANKS, Alaska (AP) — In a story Feb. 9 about a Doyon, Ltd., plan to extend a road to a drilling prospect in the Nenana Basin, The Associated Press reported erroneously the reason for drilling an exploratory well. The decision to drill was based on the potential for oil, not natural gas.
A corrected version of the story is below:
Native corp.: Exploration shows promising reserves
Native Alaska corporation says exploration showed encouraging oil reserves, plans 2nd well
FAIRBANKS, Alaska (AP) — A Fairbanks-based Alaska Native corporation is in the process of extending a road in the Nenana Basin to reach a planned drill site they hope taps into crude oil reserves.
The well will be drilled on state land and named Nunivak No. 2. Crews will drill down about 12,000 feet in search of oil. Drilling is expected to begin in mid-June, The Fairbanks Daily News-Miner reported (http://bit.ly/12C0S0I).
"We're extending a road we had built in 2009 for our first well out there," said Jim Mery, vice president of lands and natural resources for Doyon, Ltd.
An earlier well, Nunivak No. 1, tapped a 3,000-acre area and the results showed an "active petroleum system" in the area, although not enough to make a development project economically viable in the immediate vicinity.
The Nenana Basin is estimated to hold 1 trillion to 6 trillion cubic feet of natural gas and the first well targeted gas.
The first well "demonstrated the oil prone nature of source rocks in the basin," Mery said by email, and provided "sufficient encouragement" to convince Doyon to drill a second well. The Nunivak No. 1 well has since been plugged and abandoned, he said.
Mery did not provide a cost estimate, but Doyon and its partners, Usibelli Energy, Arctic Slope Regional Corporation and Denver-based Rampart Energy, sunk about $15 million into drilling the first well.
Doyon is the first company to take advantage of state incentives that reimburse companies for much of the cost of an exploratory well in the frontier basins, along with credits for seismic exploration.
In December, Doyon said it also plans to do seismic tests on some of its property in the Yukon Flats, with a goal of finding a prospect for future drilling.