Donkel refiles for GPT unit after remand

DNR commissioner vacated 2023 DO&G decision denying unit for review of supplemental material within totality of application

Kristen Nelson

Petroleum News

On March 23 the Alaska Department of Natural Resources' Division of Oil and Gas published notice of an application by working interest owners Daniel K. Donkel and Samuel H. Cade, and Donkel Oil & Gas LLC as the unit operator, to form the Greater Point Thomson unit, with public comments due April 26 by 4:30 p.m.

This revised application was filed Nov. 8. The original application was filed in late 2022 and denied by the division in 2023.

Donkel appealed that denial to the DNR commissioner the same year.

In June 2024 the commissioner remanded the decision to the division for additional review, but did not take a position on the underlying merits of the division's decision.

The division's basis for its 2023 denial was twofold: it said the application did "not propose any activity that would maximize efficient recovery upon unitization any more than when compared to activity conducted on a lease-by-lease basis" and also said unitizing the leases would run counter of the state's objective of encouraging "diligent exploration of its leases."

Remand

In particular, the second supplement to the appeal contained well data and information not included in the original application.

The data were the subject of litigation that resulted in confidentiality periods ending and information being released.

Once the information was released, Donkel and Cade sought to have that information considered in their appeal.

The commissioner found it appropriate for the division to review the supplemental information since it was now available and remanded "the entire matter to the division to undertake a complete review of the application, and make a new decision based on the totality of the information."

Donkel and Cade were asked to supplement and revise the application; the commissioner said the division may also request additional information.

Revised application

Donkel and Cade said they currently own 24 leases in the GPT unit area for which they paid more than $1.2 million in bonus bids and on which they pay some $362,000 annually in rent payments. (More than half of the leases are now past their expiration dates; formation of the unit would hold them for as long as they were part of the unit.)

Donkel and Cade said they have acquired a large seismic and well database including purchasing 2D seismic in the area. There is also data available from wells drilled in the area.

Work started with "creation of a robust regional geological model," and findings of the technical team indicate multiple pay zones on the GPT unit leases "likely to contain hydrocarbons in amounts that would justify the cost of delineation and development."

Donkel and Cade said they "are approaching the multi-million-dollar investment that will be required for development of the GPTU on a sequential basis, leveraging historic data and initiating new scientific analysis."

The application, available on the division's website, includes a detailed discussion of work done to date.

Exploration plan

A single well is included in the exploration plan, a delineation of the exiting Point Thomson unit 17 well, with that work listed as starting late in the fourth year or in the fifth year after GPT unit approval.

In year one, the plan is to continue licensing existing Point Thomson unit seismic data and relevant 2D data in the area of the proposed GPT unit, incorporating new data into existing seismic and updating relevant maps. An engineering and economic analysis of the Neocomian sand play would screen drilling locations and development scenarios. The Alaska Industrial Development and Export Authority has leased acreage in the Coastal Plain of the Arctic National Wildlife Refuge adjacent to the GPT unit and engagement with AIDEA would occur in years one and two on development of those leases, as would engagement with Qilak LNG to understand that company's needs for additional gas supply for its projects. Preliminary work would be completed on AVO rock properties modeling.

Feasibility studies would begin in two areas: drilling and testing three additional wells -- Stinson 2, an ANWR delineation well on AIDEA leases and a well on tracts 79/80 to delineate "the Eastern Point Thomson Pool PTU PA" along with a study of feasibility for comprehensive 3D over GTP unit and AIDEA leases.

In year two an engineering and economic analysis of the Eocene and Cambrian sand reservoirs would begin to screen drilling locations and development scenarios. The company would work with the PTU operator "on facility sharing options for drilling activities and future production activities," and integrate new interpretations into modeling studies.

In year three, preparation would begin to drill the first GPT unit well from an onshore pad through the Thomson sands "to delineate the PTU-17 well" and would continue the work begun in year two with the Point Thomson operator on facility sharing options. (PTU-17 is the single well operator Hilcorp Alaska has online at Point Thomson.)

Also planned for year three are biostragraphic/palynological study of key wells.

In year four, well planning and permitting would continue for the winter drilling season with drilling of the delineation well anticipated to begin in February at the end of the fourth year or beginning of the fifth year after unit approval. Also planned is an update of key horizons and the beginning of seismic attribute analysis.

In year five, activities to put the delineation well into production would be initiated; all mapped horizons would be updated and seismic attribute analysis would continue. Data from the delineation well would be collected and analyzed, economic analysis conducted and resource assessment calibrated by well data, with a 3D geologic model constructed based on well results.