|
Division conditionally approves Hilcorp's N Trading Bay unit POD
Kristen Nelson Petroleum News
The Alaska Department of Natural Resources' Division of Oil and Gas has given Hilcorp Alaska a specific set of conditions it must meet or the division will terminate the North Trading Bay unit.
The NTBU is made up of three state leases in Cook Inlet, adjacent on the northeast to the much larger Trading Bay unit. North Trading Bay hasn't been in production since 2005 when it was operated by Marathon Oil, the division said in its June 4 conditional approval of Hilcorp's 2024 plan of development for the unit, signed by division Director Derek Nottingham.
Alaska Oil and Gas Conservation Commission data show NTBU production began in 1968 with cumulative production over the unit's life of 27.4 million barrels of oil and 13.1 billion cubic feet of natural gas. The two platforms in the unit, Spark and Spurr, were built by Marathon in 1967 the division said.
Hilcorp acquired the unit in 2013 and has recently been trying to access gas resources at North Trading Bay from the Monopod in the Trading Bay unit. Spark and Spurr are lighthoused, with the crane and helidecks functional, but not the crew facilities, and Hilcorp told the division in its 2017 POD that returning either platform to production would not be economically or technically feasible.
Recent POD issues The division said that in its 2018 POD Hilcorp proposed drilling the A-04RD well from the Trading Bay unit Monopod, but the well was not drilled.
In its 2019 POD, Hilcorp proposed to sidetrack from the A-10 on the Monopod, rather than the A-04RD, "to delineate producing acreage outside the current NTBU boundary that is geologically connected to the current NTBU acreage," the division said, and, if that drilling was successful, the company planned to petition for an expansion of the Trading Bay unit.
The division denied the 2019 POD and administratively terminated the NTBU, citing a lack of "diligent operations to restore production."
Hilcorp appealed and the DNR Commissioner reversed the denial ant termination, inviting Hilcorp to submit a new POD allowing the company to identify targets it could drill within 16 months of the submission, targets which the company would then drill within the next one-year POD.
In its 2023 POD, Hilcorp "committed to reestablishing production from the NTBU by drilling the A-10RD3, a sidetrack well from the Monopod Platform within the Trading Bay Unit," the division said.
The sidetrack target was a gas accumulation within the NTBU, and Hilcorp proposed using that gas as fuel gas for the Monopod, eliminating the use of gas from Steelhead, allowing that gas to be sold.
The division said Hilcorp made two unsuccessful attempts during the 2023 POD period to drill the sidetrack.
In the 2024 POD Hilcorp said it would evaluate options to restore NTBU production and told the division that "the repeated drilling failures of the A-10RD2 & A-10RD3 warrants a deeper look at the development plan and consideration of other wellbore for access" and said it would also "study the subsurface and facility access options and propose a refreshed development strategy."
Conditions The division attached six conditions to its approval of the POD.
*It only approved the POD through May 2, 2025, with the 2025 POD due Feb. 1.
*Hilcorp said it would reevaluate the platforms for future utility and determine if they would be viable for refurbishment for drilling and production, and the division said if Hilcorp chooses to refurbish Spark and Spurr it must submit a plan of refurbishment by Feb. 1, describing in detail work necessary and including a timeline with milestones. Annual inspection reports on the platforms and associated pipelines are required, until refurbishment is complete or final dismantlement, removal and restoration has occurred.
*The division is requiring "a presentation and interpreted data" on the remaining resource in place, well plans and design for reestablishing NTBU production, including "a reasonable timeline for drilling and production from the NTBU."
*If Hilcorp determines it won't pursue gas or oil targets at NTBU, it "will determine if the platforms will be repurposed for renewable energy projects or move toward DR&R."
*The company must provide the division will all permits and applications for drilling and production operations.
*The unit will automatically terminate if Hilcorp determines "it is not economically viable to pursue either the gas or oil targets within the NTBU" and certification for any wells at NTBU will be terminated, the division said.
--KRISTEN NELSON
| 