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Producers 2024: Hilcorp focuses on large Cook Inlet fields
Beluga, North Cook Inlet, focus of development gas well drilling; some smaller fields also see attention
Kristen Nelson Petroleum News
Hilcorp Alaska is the dominant oil and gas producer in Cook Inlet, with the company's focus on natural gas, which provides heat and electrical power for Southcentral Alaska.
Hilcorp's Houston-based parent, Hilcorp Energy, is one of the largest U.S. privately held exploration and production companies, the company says on its website. Founded in 1989, the company operates in Alabama, Alaska, Colorado, Louisiana, New Mexico, Ohio, Pennsylvania, Texas and Wyoming.
"We deploy new resources to increase production and expand cashflow," Hilcorp says, allowing the company "to reduce debt and opportunistically acquire additional fields, beginning a new cycle. By adopting this approach, we have proven our ability to revitalize mature and often overlooked properties."
Hilcorp Alaska became an operator in Cook Inlet in 2012, taking over Chevron/Union Oil Company of California's Cook Inlet assets, primarily mature fields dating to the beginning of Cook Inlet production in the late 1950s and early 1960s. In early 2013, Hilcorp acquired Marathon Oil's Cook Inlet assets, also primarily mature fields, but including the majority working interest in one newer large field, Ninilchik, which Marathon developed and brought online in the early 2000s.
In 2015, Hilcorp acquired XTO Energy's Cook Inlet assets, and in 2016 took over several of ConocoPhillips Alaska's Cook Inlet assets, primarily the North Cook Inlet field but also minority interests in and around North Trading Bay and other small interests.
Hilcorp took over as operator at the west side Beluga gas field in 2016 when ConocoPhillips sold its interest in that field to Anchorage-based electric utilities Municipal Light & Power and Chugach Electric Association (Chugach Electric purchased ML&P in 2020 and now has a two-thirds working interest in Beluga).
Focus on gas Alaska Oil and Gas Conservation Commission production data for August show Hilcorp Alaska's most productive gas fields are Beluga River, where it holds a 33.33% working interest ownership and operates on behalf of itself and majority WIO Chugach Electric Association, North Cook Inlet, in which Hilcorp holds 100% working interest in producing intervals and Ninilchik, in which Hilcorp has 100% WIO.
In August, Hilcorp's share of produced Cook Inlet natural gas was 74.9% and its share of produced Cook Inlet oil was 73.8%.
Hilcorp's focus is on extending the life of mature fields where more oil and gas can be extracted, and after acquiring Cook Inlet properties the company initially focused on maximizing production from existing facilities.
It has also worked to expand production at existing fields, primarily large natural gas fields, with current focus on Beluga and North Cook Inlet.
Beluga The Beluga River gas field on the west side of Cook Inlet was discovered in 1962 in a well targeting deeper oil. Sustained production didn't begin until the late 1960s after Chugach Electric Association built a power plant at Beluga, using natural gas from the field to generate electricity. In the 1980s, Enstar built a pipeline connecting to Anchorage, and began providing Beluga gas for heating.
Hilcorp holds a one-third working interest in the field and is the operator; Chugach Electric Association holds a two-thirds interest.
The Beluga River unit is primarily managed by the federal Bureau of Land Management with the state managing the subsurface of the northern half of the leases. The field produces from a number of onshore pads on the west side of Cook Inlet.
In its 62nd plan of development and operations for Beluga River, covering June 1, 2024, through May 31, 2025, and submitted to BLM in March, Hilcorp said that during the 2024 POD period it anticipated drilling as many as six grassroots wells with Rig 147, each targeting Sterling and Beluga gas.
In reviewing work completed during the 2023 POD, Hilcorp said it drilled five grassroots wells targeting Sterling and Beluga gas sands, did seven workovers and performed facility work including moving a compressor from C Pad to K Pad to provide compression at the pad which previously had no permanent on pad compression, and installing facilities at the DW-02 Pad allowing for disposal of drill cuttings and drilling mud.
AOGCC drilling permit data over the last calendar year show Hilcorp permitted eight Beluga River wells, completing six -- the most wells completed at any Cook Inlet field in that period.
AOGCC production data for August 2024 show Beluga River averaged 42,771 thousand cubic feet per day, 22.87% of inlet gas production in that month, and a volume which was up 7.71% from July and up 25.17% from August 2023.
North Cook Inlet Currently the second most productive gas field in Southcentral, the North Cook Inlet unit has been in production since 1969, the Alaska Department of Natural Resources' Division of Oil and Gas said in a May 2024 approval of the current plan of development which covers July 1, 2024, through June 30, 2025. Cumulative production was 1.963 billion cubic feet of natural gas through March of this year.
Hilcorp acquired the North Cook Inlet unit from ConocoPhillips effective Oct. 31, 2016, the division said and holds 100% working interest in producing intervals in the unit, which is operated from the Tyonek platform.
In the 2023 POD period Hilcorp mobilized jack-up Rig 151 to the platform and drilled two grassroots wells, sidetracked one well and completed plugging and abandonment of the Cook Inlet State 17589, an exploration well drilled in 1962.
In the 2024 POD period, Hilcorp told the division it planned as many as three grassroots wells targeting Beluga sands and up to two sidetracks, although the division said that in the technical meeting on the POD, the company said it was not working on plans for the second sidetrack due to the limited drilling season.
AOGCC records for the preceding calendar year show Hilcorp received eight drilling permits for North Cook Inlet and completed five wells.
August AOGCC production data show North Cook Inlet averaged 38,510 mcf per day, 20.59% of inlet gas production, down 1.92% from July but up 11.6% from August 2023.
Ninilchik Ninilchik, which was the most productive natural gas field in Cook Inlet in August 2023, is currently third, averaging 29,134 mcf per day in August 2024, 15.58% of inlet production in that month, down 5.46% from July and down 25.64% from August 2023, AOGCC production data show.
Hilcorp Alaska has a 100% working interest in Ninilchik, a unit formed by Marathon Oil in 2001 and expanded in 2003 and again in 2016. Hilcorp acquired the share of Ninilchik owned by Union Oil Company of California when it acquired that company's Cook Inlet assets in 2012 and acquired a majority interest and operatorship in 2013 as part of its acquisition of Marathon Oil's Cook Inlet assets.
Marathon began sustained production in 2003, and while contraction to approved participating areas and acreage supporting production is required after 10 years of sustained production, Ninilchik contraction has been delayed several times, as field expansion and development continues. Last year Hilcorp applied to expand the unit to the south where it has confirmed natural gas in the Pearl Structure, and to establish the Pearl participating area.
AOGCC records show no wells permitted or completed at the unit in the past 12 months.
The unit, produced from onshore pads, includes onshore and offshore acreage.
Ninilchik produces natural gas from three participating areas, Falls Creek, Grassim Oskolkoff and Susan Dionne-Paxton, the Division of Oil and Gas said in a June approval of Hilcorp's 20th plan of development for the unit, covering Aug. 1, 2024, through July 31, 2025.
Hilcorp did not drill or complete any development wells in the previous 19th POD but did various well work projects and completed Pearl Pad compressor installation.
Proposed 2024-25 POD work includes various well work and facility projects
Kenai The field currently ranking fourth in Cook Inlet gas production is Hilcorp Alaska's Kenai gas field, which AOGCC data show averaged 19,292 mcf per day in August 2024, down 2.55% from July and down 0.59% from August 2023. The field went into production in 1960.
AOGCC drilling data show that Hilcorp permitted four wells in the field over the last 12 months, completing three.
Kenai is a federally managed field, onshore on the Kenai Peninsula, and in the 66th plan of development and operations for the field, effective June 1, 2024, through May 31, 2025, submitted to BLM in March of this year, Hilcorp said that under the previous POD it completed two wells, with a third planned to spud in March.
Hilcorp also worked over several wells in the 65th POD, completing all plans approved for that POD.
In its 66th POD Hilcorp said that pending results of drilling under the 65th POD, it planned to drill two wells during the 66th POD in the fall of 2024 and winter of 2024-25. A workover program is also planned, along with planning and designing phase 1 of storage and processing for contaminated gravels at the field.
Trading Bay Hilcorp's Trading Bay unit produces both oil and natural gas from the McArthur River and Trading Bay fields. Platforms, north to south, are Monopod, King Salmon, Grayling, Steelhead and Dolly Varden.
In its May 22 approval of the 2024 plan of development for Trading Bay the Division of Oil and Gas said the unit was formed and began sustained production in 1967, with current production from four participating areas in the McArthur River field: the Hemlock oil pool PA, the West Foreland oil pool PA, the Middle Kenai "G" oil pool PA and the Grayling gas sands PA.
Hilcorp took over as operator in January 2012, and in August 2013 the division approved the second expansion of the unit to include the 5,280-acre Trading Bay field.
The division said cumulative production from the Trading Bay field of March 31, 2024, was 110.6 million barrels of oil and 91.2 billion cubic feet of natural gas, while cumulative production from the McArthur River field was 660.2 million barrels of oil and 1,552.3 bcf of natural gas.
Under the 2023 plan Hilcorp completed five rig workovers and multiple non-rig operations, as well as attempting to drill the A-10RD3 sidetrack from the Monopod into the North Trading Bay unit, but the division said that "mechanical issues prevented the well from reaching the intended subsurface target."
The 2024 plan of development covers July 1, 2024, through June 30, 2025, and includes two grassroots wells from Steelhead, with one of the wells begun prior to the 2024 POD. Various rig and non-rig drilling activities are planned.
AOGCC reports McArthur and Trading Bay production separately. On the gas side, McArthur River accounted for 6.12% of inlet production in August, 11,438 mcf per day, while Trading Bay averaged only 705 mcf per day. Combined the fields accounted for 6.5% of inlet production in that month. Compared to August 2023, McArthur River was up 1.38%, while Trading Bay was down 8.8%.
On the oil side, McArthur River averaged 2,391 barrels per day in August, 28.53% of inlet production -- the field is the inlet's largest current oil producer -- while Trading Bay averaged 787 bpd, 9.39%, a combined 37.92%.
North Trading Bay The North Trading Bay unit formerly produced natural gas from the Spurr and Spark platforms, built in 1967. Production ceased in 2005; the platforms are maintained in lighthouse mode. The division said in a June 2024 conditional approval of a 2024 plan of development that the crane and helidecks on Spurr and Spark are functional, but crew quarters are not; no wells are active.
Hilcorp took over as operator in 2013 and in 2017 told the division it would not be economically or technically feasible to return the Spark and Spurr to production, but proposed drilling from the Monopod in the Trading Bay unit into the North Trading Bay unit.
By 2018, the company was proposing a sidetrack of the A-10 Monopod well into acreage not in the NTBU but geologically connected to acreage in that unit and said it would petition for expansion of the NTBU if that drilling was successful.
So far attempts to drill that sidetrack have not been successful.
The division said Hilcorp has committed to evaluate options to restore production from NTBU during the 2024 POD, and told the division that "the repeated failures of the A-10RD2 an A-10RD3 warrants a deeper look at the development plan and consideration of other wellbore for access" as well as studying subsurface and facility options and proposing "a refreshed development strategy."
In its June 4, 2024, conditional approval of the 2024 POD the division said it was approving the POD only through May 2; requiring a plan of refurbishment by Feb. 1, 2025, if Hilcorp decides to refurbish the platforms; requiring a presentation on remaining resources in place and plans for production from NTBU; requiring discussions on future of platforms if production targets within NTBU determined not to be economic; and requiring the company to provide the division with all relevant permits and applications.
The division said that if the company determines it is not economically viable to pursue resources within the unit, it will automatically terminate and certification of any wells within the unit will be rescinded.
Swanson River Hilcorp acquired the Swanson River unit on the Kenai Peninsula from Union Oil Company of California, becoming operator in 2012. Swanson, site of the 1957 Cook Inlet discovery well, has been in production since 1958, producing both oil and gas. In August AOGCC production data show the field averaged 729 bpd of oil, 8.7% of inlet total, and 7,530 thousand cubic feet per day of gas, 4.03% of inlet total for that month. Gas production was up 55.92% from July but down 15.51% from August 2023.
The field is managed by the federal Bureau of Land Management, and the 60th plan of development and operations for the field, submitted March 1, 2024, shows cumulative gas production for 2023 of 2,480 million standard cubic feet of gas and 274,000 barrels of oil.
During the 2023 POD, effective April 1, 2023, through May 31, 2024, Hilcorp drilled three gas wells and numerous workovers.
For the 2024 POD, Hilcorp planned to continue work to identify remaining gas reserves in the North and Central Fault Blocks and remaining oil reserves across the field.
One gas well is planned for the 2024 POD period and numerous workovers, along with facilities work.
Cannery Loop Alaska Oil and Gas Conservation Commission data show Cannery Loop was the highest gas producer among Hilcorp's smaller fields in August. The Cannery Loop unit was formed in 1978, with Union Oil Company of California as operator, the Alaska Division of Oil and Gas said June 27 when it approved the 2024 plan of development for the unit from Hilcorp Alaska, which took over as operator in 2012 after it acquired Union's Cook Inlet assets.
Production at the unit totaled 2.1 billion cubic feet of gas in calendar year 2023, down from 2.3 bcf in 2022, the division said, an average of 5.8 million cubic feet per day compared to 6.3 million cubic feet per day in calendar year 2022.
AOGCC production data for August 2024 show Cannery Loop averaged 4,941 thousand cubic feet per day, 2.64% of inlet production in that month, down 3.02% from July and down 4.81% from an August 2023 average of 5,191 mcf per day.
The division said that during the 2023 POD period, Aug. 1 through July 31, 2024, Hilcorp did two workovers and began drilling a grassroots well, CLU 16. AOGCC records show that well was completed in June, with production beginning in that same month.
For the 2024 POD the division said Hilcorp proposed evaluating the potential for drilling up to two grassroots wells, based on results from the CLU 16.
"Depending on the subsurface locations of potential follow-up grassroots drill wells, Hilcorp intends to expand the CLU 1 Pad and/or install additional compressor capacity at the CLU 3 Pad," the division said. Also during the 2024 POD, Aug. 1 through July 31, 2025, various rig and non-rig projects may include preparing for potential sidetracks, coil cleanout operations, additional perforations and setting plugs or patches for potential water shutoffs.
Beaver Creek Another top natural gas producer among Hilcorp's smaller Cook Inlet fields, Beaver Creek, accounted for 2.42% of inlet production in August. AOGCC production data for that month show the field averaged 4,525 mcf per day, a drop of 43.61% from its July volumes and a drop of 14.87% from its August 2023 average of 5,315 mcf per day. Beaver Creek also produces oil, averaging 242 bpd in August, 2.88% of inlet production, and down 4.7% from July and down 21.99% from August 2023 when the field's production averaged 310 bpd.
The Beaver Creek discovery well, Marathon's Beaver Creek No. 4, was drilled in 1972 and production of both oil and gas began late that year.
Hilcorp purchased the field from Marathon and became operator in 2012, AOGCC said in its pool statistics. Beaver Creek is on the Kenai Peninsula southwest of Swanson River.
The field is managed by the Bureau of Land Management and Hilcorp submitted the 57th plan of development and operations for the field to BLM in March 2024.
During the 2023 POD Hilcorp reported workovers on five wells, studies of the gas reservoirs on three wells and installation of a vapor recovery unit.
For the 2024 POD, effective June 1 through May 31, 2025, Hilcorp said that pending results of an upcoming field study, it would drill up to one well targeting the Upper Beluga, likely a sidetrack, in the fourth quarter of 2024 or the first quarter of 2025.
AOGCC data show Hilcorp permitted two development wells at Beaver Creek in September, both sidetracks.
Ivan River Ivan River is one of three small Hilcorp gas fields on the west side of Cook Inlet, north and northeast of the much larger Beluga River field.
Ivan River became a Hilcorp asset when the company took over Chevron/Union Oil Company of California's Cook Inlet assets in 2012.
The Ivan River unit was formed in 1967 by Standard Oil Company of California and produces from an undefined gas pool.
Through the end of August, AOGCC data show cumulative gas production from Ivan River of 96.881 billion cubic feet.
In August the field averaged 3,320 thousand cubic feet per day, 1.78% of inlet production, up 78.36% from July but down 41.9% from August 2023 production of 5,715 mcf per day.
In its May 8 approval of Hilcorp's 2024 POD for Ivan River, the field's 54th, the division said that in the 53rd POD Hilcorp continued evaluating opportunities for rig workovers, subsurface opportunities and delineation wells, along with wellwork, upgrading the water disposal system and optimizing compression. The 2024 POD covers June 1, 2024, through May 31, 2025.
Company plans during the 54th POD included evaluating rig and non-rig workover opportunities; reviewing and evaluating opportunities to drill delineation wells; doing pad and facility work to support potential grassroots well drilling in 2025; installation of coalescer for compressor; and routine facility repair and replacement as needed.
On Oct. 15 the division approved a Hilcorp unit plan of operations amendment to expand the Ivan River pad by 2.1 acres.
In an August application for the operations amendment, the company said additional development wells are planned for 2025 with the pad expansion would provide space for the drill rig for the new wells and "allowing safe access and uninterrupted facility operations." Subject to application approval, the company said pad expansion work would begin this fall.
*Lewis River
The unit at Lewis River, a small onshore gas field on the west side of Cook Inlet, was formed in 1977 with Cities Service Oil Co. as the original operator. Hilcorp took over as operator from Union Oil Company of California Jan. 1, 2012, the Alaska Division of Oil and Gas said May 8, in its approval of the 49th plan of development for the unit. AOGCC data show cumulative production through August 2024 of 17.86 billion cubic feet. The field averaged 3,450 thousand cubic feet per day in August, 1.84% of inlet gas production, down 13.65% from July but up 893.65% from August 2023, when the field averaged 347 mcf per day. In August 2023, there was just a single well on production at the field.
The division said that in the 48th POD Hilcorp brought the LRU C-02 well online with initial production of 2 million cubic feet per day and installed a line heater and a separator to accommodate the new production. Production is now from two wells at the field.
Hilcorp's plans for the 49th POD, which covers June 1, 2024, through May 31, 2025, include continuing evaluation of drilling delineation wells, evaluating potential coil cleanout operations and installing a condenser for the Lewis River compressor.
*Deep Creek
The Deep Creek unit was formed in 2001 and is jointly managed by the Alaska Division of Oil and Gas and Cook Inlet Region Inc. Sustained production began from the Happy Valley participating area in late 2004. Hilcorp took over as operator in January 2012 after acquiring Union Oil Company of California's Cook Inlet assets.
AOGCC data show cumulative production of 44.5 billion cubic feet of natural gas from Deep Creek. In August 2024 the field averaged 3,215 thousand cubic feet per day, 1.72% of inlet gas production, down 2.22% from July and down 10.26% from an August 2023 average of 3,582 mcf per day.
The division approved the 21st Deep Creek plan of development June 27, covering Aug. 1, 2024, through July 31, 2025.
During the 2023 POD, Hilcorp added perforations from three wells.
In the 2024 POD, the division said Hilcorp planned wellwork as opportunities arise, evalua
*Granite Point
Hilcorp's Granite Point unit, producing from the Granite Point, Anna and Bruce platforms in Cook Inlet, is one of the company's smaller gas fields, averaging 3,043 thousand cubic feet per day in August, 1.63% of inlet production, but its second largest Cook Inlet oil producer, averaging 2,037 bpd, 24.3% of inlet oil, AOGCC production data show. The 3,043 mcf per day average this August was down 1.67% from July and down 7.91% from August 2023, when gas production averaged 3,304 mcf per day. Oil production was unchanged from July to August, but down 7.73% from an August 2023 average of 2,208 bpd.
In its May 22 approval of Hilcorp's 2024 POD for Granite Point, the Alaska Division of Oil and Gas said Granite Point production began in 1967. AOGCC data show cumulative production through August of 145 billion cubic feet of gas and 159.55 million barrels of oil.
Hilcorp purchased Chevron/Union Oil Company of California's working interests in late 2011 and became operator in early 2012. In mid-2012 Hilcorp acquired the remaining 75% working interest in the unit from ExxonMobil Production Co.
The unit was originally called South Granite Point; it was expanded in 2015 to include the Granite Point field and renamed the Granite Point unit.
The division said that Hilcorp had committed in its 2023 POD to drilling up to three grassroots wells from the Bruce Platform, using the 151 jack-up, but did not drill the wells, telling the division that with only one jack-up available in Cook Inlet, it chose to defer the Granite Point wells in favor of wells within the North Cook Inlet unit because it had higher confidence in bringing North Cook Inlet gas to market.
The division said that in its 2024 POD, Hilcorp committed to drilling up to one grassroots well targeting Tyonek format gas from the Bruce Platform. If commercial qualities of gas are found, Hilcorp told the division it would "evaluate production facility and pipeline capacity constraints to optimize delivery of gas between existing platforms and the Granite Point Tank Farm." The company also plans various non-rig activities.
*Pretty Creek
Pretty Creek is an onshore gas field on the west side of Cook Inlet. It was unitized in 1998 by Union Oil Company of California and acquired by Hilcorp, which became the operator effective Jan. 1, 2012. Through August, AOGCC production data show the field has produced cumulatively 9.617 billion cubic feet of gas.
Recent production from the field has been sporadic: just 78 thousand cubic feet so far in 2024; 1,252 mcf in 2023; 2,081 mcf in 2022; 345 mcf in 2021; no production in 2020. The last production of any significance was in 2013, when production totaled 25,217 mcf for the year. There is a single well.
In its May 8 approval of the 46th POD for Pretty Creek, the division said Hilcorp has not committed to specific exploration or delineation activities, but "is evaluating the possibility of drilling up to two development wells targeting Sterling, Beluga, and Tyonek sands," and anticipates "uphole recompletes, perforation adds and rig workovers to existing wells to help maintain and increase productivity."
As this edition of The Producers was wrapping up, activity at Pretty Creek was ramping up, with a sidetrack drilled in September and an application filed with the division to expand the Pretty Creek pad, with development drilling from the expanded pad set for 2025.
*Nikolaevsk The unit at Nikolaevsk on the Kenai Peninsula, which produces from a single well, was terminated in 2021 at operator Hilcorp's request. Two of the former unit tracts are allocated from the Red No. 1 well and Hilcorp continues to operate production as a lease operation.
In August, AOGCC data show the field averaged 210 thousand cubic feet per day, 0.11 % of inlet gas production, down 11.91% from July and down 10.04% from August 2023 production of 233 mcf per day.
*Seaview
Hilcorp discovered and developed Seaview, the most southerly and the newest of the Kenai Peninsula gas fields, including drilling two development wells, Seaview 8 and Seaview 9, and installing production facilities and a pipeline.
AOGCC data show the field produced from Seaview 8 from June 2021 through August 2022, a cumulative total of 181,837 thousand cubic feet. There has been no production since.
In its June 27 approval of the fifth, 2024, plan of development for Seaview, the Alaska Division of Oil and Gas said that in the 2023 POD, Hilcorp has proposed evaluating adding perforations in the Seaview 9 well but elected not to because of "the proximity of the surface casing to the proposed perforation." The company also did not do an injectivity test for coalbed methane opportunities. It did not replace the compressor at the Seaview Pad 1 "because other compression opportunities took precedence."
The company did acquire a north-south seismic line from Seaview north to Ninilchik, looking to enhance its understanding "of the overall structure in the Seaview and Whiskey Gulch region for future development and exploration."
For the 2024 POD period, Aug. 1, 2024, through July 31, 2025, Hilcorp is planning "a shallow stratigraphic drill test to understand the structural relation between Seaview and Whiskey Gulch." It will evaluate drilling a test well to sands shallower than accessible in current wellbores and evaluate adding perforations in the existing wells.
It is also exploring potential to collect data and test coalbed methane potential at Seaview.
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