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The Explorers 2024: Whiskey and Cotton for Hilcorp this winter
Major Alaska producer continues test well strategy at Cook Inlet prospects
Eric Lidji for Petroleum News
Throughout its 13-year tenure in Alaska, Hilcorp Alaska LLC has devoted most of its exploration energies toward expanding existing natural gas and oil production in the Kenai Peninsula and more recently existing oil production on the North Slope.
The Texas-based independent came to Alaska to revitalize a large portfolio of fields that had long been the most prolific in the Cook Inlet basin but required new investment.
Within that portfolio, though, was acreage in the Kenai Peninsula south of Kasilof that held a different opportunity: a sequence of under-explored units surrounded by promising exploration acreage. These include the Ninilchik unit, the Deep Creek unit and the Seaview unit, as well as the associated Pearl, Whiskey Gulch and Cottonfield prospects.
This year, the company is continuing that effort with planned exploration campaigns at the Whiskey Gulch and Cottonfield prospects -- two prospects it has explored before.
Hilcorp drilled a large number of test and exploration wells at Whiskey Gulch in 2019, 2020 and 2022 and also at Cottonfield in 2022. In both cases, the company expected to convert its exploration activity into applications for new units and participating areas.
Whiskey Gulch In plans presented for this past winter, Hilcorp proposed drilling the 8,491-foot Whiskey Gulch No. 15 well. It would be a delineation well, adding to the knowledge gained through 12 previous stratigraphic test wells and two exploration wells at the prospect.
The company planned to spud in January 2024 and test the well for 30 days.
No results have been released from Whiskey Gulch drilling. Previous exploration wells targeted "unproved oil and/or gas reserves in the Sterling, Beluga, and Tyonek formations within the Whiskey Gulch Undefined Oil and Gas Pools," according to Hilcorp. "There was some gas found in each well but neither are commercially viable at this time."
The Whiskey Gulch field is located some 2.5 miles north of Anchor Point on the southern Kenai Peninsula, directly north of the Hilcorp-operated Seaview unit. The company brought Seaview online in 2021 but the unit has been offline since September 2022.
As it has often done in Cook Inlet, Hilcorp started with a stratigraphic test well program that transitioned into a traditional exploration venture. Toward the end of 2019, the company received Alaska Oil and Gas Conservation Commission permits for five shallow stratigraphic test wells on private land near Anchor Point: Whiskey Gulch 1-B, Whiskey Gulch 2, Whiskey Gulch 3, Whiskey Gulch 7 and Whiskey Gulch 10.
In November 2019, the company drilled all but Whiskey Gulch 3. The following year, it received seven additional permits: Whiskey Gulch 4, Whiskey Gulch 5A, Whiskey Gulch 6, Whiskey Gulch 9A, Whiskey Gulch 11, Whiskey Gulch 12 and Whiskey Gulch 13. In July 2020, the company completed all seven test wells, in addition to Whiskey Gulch 3.
Hilcorp proposed a two-well exploration program on private lands at the end of Cape Ninilchik Avenue. The company drilled Whiskey Gulch No. 1 over the latter half of 2021 targeting oil and gas to the southeast and Whiskey Gulch No. 14 in early 2022 targeting gas to the northeast. The company returned in early 2023 for a 2D seismic program.
In permitting documents for Whiskey Gulch No. 14, Hilcorp said that analysis of Whiskey Gulch No. 1 and wells from surrounding fields "suggests that the Whiskey Gulch Undefined Gas Pool consists of a series of thin, discontinuous, stacked channel sands with a low net-to-gross ratio," requiring tighter spacing that other fields.
Given the complexity of land ownership in the southern Kenai Peninsula, Hilcorp would almost certainly need to apply for a participating area to develop Whiskey Gulch.
Cottonfield In the summer of 2022, Hilcorp drilled 10 wells at its Cottonfield prospect in the southern Kenai Peninsula, east of the Cosmopolitan unit: Cottonfield No. 1, Cottonfield No. 2, Cottonfield No. 3, Cottonfield No. 4, Cottonfield No. 5, Cottonfield No. 10, Cottonfield No. 11, Cottonfield No. 12, Cottonfield No. 13 and Cottonfield No. 14. (An additional well, Cottonfield No. 9, was also permitted but has not been reported as completed.)
This winter, the company planned to drill the 7,838-foot Cottonfield No. 6 well, which would target unproven gas reserves in the Sterling, Beluga and Tyonek formations.
The proximity of the proposed well to nearby residences forced the company to apply for a spacing exemption. A hearing in January 2024 yielded much concern from neighbors.
In February 2024, Hilcorp received approval for its Sterling Highway 2D seismic program. The program would cover some 46 miles between Clam Gulch and Anchor Point. It would include two vibe trucks, up to 1,240 sonic nodes and a utility terrain vehicle placing nodal receivers every 27.5 feet set back 10 to 25 feet from the roadway.
Public commenters raised concerns about increased noise and traffic associated with the program. Hilcorp claimed that the program would not exceed normal noise for highway traffic and that the program would run during the off-season for peak tourist activities.
Associated with the program, Hilcorp applied for the Southern Kenai Transition Zone seismic program. The program includes as many as 60.2 miles of nodal seismic covering offshore, onshore and tidal zones between Ninilchik and Anchor Point over six weeks.
Strategy Whiskey Gulch and Cottonfield both follow a strategy Hilcorp has repeated throughout the Kenai Peninsula: drilling stratigraphic test wells in preparation for exploration wells.
A quick summary:
* Seaview: aerial surveys in 2015, seismic in 2016, seven shallow stratigraphic wells in mid-2017, the Seaview No. 8 exploration well in late 2018, and production in June 2021.
* Deep Creek SW: two stratigraphic test wells in late 2017 associated with the Greystone prospect and the Middle Happy Valley area of the onshore Deep Creek unit.
* Pearl: seven stratigraphic test wells in mid-2017, three exploration wells in 2022, followed by the new Pearl participating area and an expansion of the Ninilchik unit.
* Whiskey Gulch: four stratigraphic test wells in late 2019, eight more in 2020, a two-well program in late 2021 and early 2022 and a 2D seismic program in early 2023.
* The Yukon Flats Basin in the Interior: airborne gravity survey in summer 2020, 13 stratigraphic test wells (Birch Creek, Canvasback and Saloon Island) in mid-2021.
* Happy Creek: seven stratigraphic test wells in mid-2022.
* Cottonfield: 11 stratigraphic test wells in mid-2022.
Beyond the inlet In addition to the Kenai Peninsula, Hilcorp has expressed an interest in three other exploration basins: the Yukon Flats basin, the Iniskin basin, and the Blackbill prospect.
Following long and ultimately unsuccessful land swap negotiations with the U.S. Fish and Wildlife Service, Doyon Ltd. signed an agreement in December 2019 with Hilcorp guiding exploration activities in the 1.6 million-acre Yukon Flats region.
Hilcorp conducted an airborne gravity survey in summer 2020 and drilled 13 of 15 permitted stratigraphic test wells in mid-2021: Birch Creek No. 1, No. SE1, No. 3, No. 4, No. 5 and No. 6, Canvasback No. 1 through No. 6 and Saloon Island No. 2. The Birch Creek wells were clustered at 16N/10-11E and 17N/7-8E. The Canvasback wells were located at 18N/7-8E. The Saloon Island wells were at 18N/12-13E and 19N/12E.
The partnership has produced little public information in the three years since that stratigraphic campaign. On its website, Doyon writes, "The next steps could be a seismic program or no activity," adding "Additional phases of the exploration project depend on several factors, including analysis of the aerial survey data and stratigraphic test results."
The Iniskin Peninsula is on the west side of Cook Inlet near the mouth of the Inlet.
Hilcorp conducted a 2D seismic survey over the Iniskin Peninsula in 2013. The survey suggested a deeper crest of an anticline in the area that had previously been overlooked.
The company acquired additional acreage but has yet to announce a drilling program, kept away by a combination of physical remoteness and some geologic complications.
Hilcorp also holds leases at the Blackbill prospect in the Cook Inlet outer continental shelf. It conducted a 3D seismic survey in 2019 and a geohazard survey in 2021.
Despite publicly released plans calling for two-to-four exploration wells between 2020 and 2022, the company had not yet permitted or drilled any Blackbill wells by early 2024.
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