Another major oil and gas company, Eni, is pulling out of Alaska, with Hilcorp Alaska acquiring Eni's assets in the state, the Nikaitchuq and Oooguruk units on the North Slope.
Hilcorp specializes in maximizing production from declining fields as majors move on to newer prospects and began doing that in Alaska in 2012 when it acquired Chevron/Union Oil Company of California's Cook Inlet assets, followed in 2013 by the acquisition of Marathon Oil's Cook Inlet assets. In 2014 Hilcorp acquired half of BP Exploration (Alaska)'s working interest in the Milne Point unit on the North Slope, taking over as operator, and in 2020 acquired BPXA's Alaska assets, becoming operator of the Prudhoe Bay unit.
With the addition of Nikaitchuq and Oooguruk, Hilcorp owns and operates or has a working interest in and operates fields across the Slope, from Point Thomson in the east, and including Duck Island/Endicott, Northstar, Prudhoe Bay, Milne Point and now Nikaitchuq and Oooguruk, the farthest west.
The acquisitions
In statements, Hilcorp management discussed the company's plans for the acquisit6ions.
"The addition of the Oooguruk and Nikaitchuq assets seamlessly integrates with Hilcorp Alaska's existing portfolio, presenting us with an exceptional opportunity to invest and optimize operations in a way that will drive increased production," Greg Lalicker, chief executive officer of Houston-based Hilcorp Energy Co., parent company of Hilcorp Alaska, said in a statement. "We will leverage our experience gained at Milne Point to further enhance the development of these assets, building upon the success achieved by Eni. This strategic investment underscores Hilcorp Alaska's unwavering commitment to Alaska, delivering enhanced production, job growth, and substantial state and local revenue for decades to come."
"In 2024, Hilcorp Alaska proudly made its largest-ever budget commitment to the state," said Luke Saugier, senior vice president of Hilcorp Alaska, "and we are excited to further expand our presence on the Slope with this acquisition. Drawing from our extensive experience and expertise gained at Milne Point and Prudhoe Bay, we are fully prepared to leverage our knowledge to drive success at Oooguruk and Nikaitchuq. I am also excited about our long-term prospects in Alaska, as we continue to play a vital role in the economy and community, while ensuring the safe and responsible development of Alaska's natural resources."
Nikaitchuq
What is Hilcorp buying?
Nikaitchuq and Oooguruk are north of the Kuparuk River unit and west and north of Hilcorp's Milne Point unit.
In April, the most recent month for which Alaska Oil and Gas Conservation Commission data was available when this issue of Petroleum News went to press, Nikaitchuq averaged 14,648 barrels per day and Oooguruk averaged 5,842 bpd; Milne Point, by contrast, averaged 43,424 bpd.
The Nikaitchuq unit, the more westerly of the two, was formed in 2004.
Eni joined the unit in 2005 and became 100% working interest owner in 2007, the company said in its most recent plan of development, covering Oct. 1, 2023, through Sept. 30, 2024. There are some 21,200 acres in the unit -- 11 state oil and gas leases -- with production from two drilling locations, Spy Island Drillsite and the Oliktok Point Pad, with production processed at the Oliktok Point Pad. AOGCC data show cumulative production of 82.9 million barrels from Nikaitchuq.
Eni said it began a one-year test of polymer injection at the Oliktok Point 1-2 well in October 2019, but that test was cut short with inconclusive results after 154 days due to logistical issues resulting from the COVID-19 pandemic. The test was resumed in March 2021 and concluded in December 2022 and allowed important information to be gathered about the effectiveness of polymer injection into the Schrader Bluff OA sands at Nikaitchuq. Eni said the findings provided support for a future full-field polymer injection project.
On the facilities side, planning was in process for the electrical power sharing project to interconnect the Nikaitchuq and Oooguruk power grids, Eni said, with the engineering complete and preliminary procurement activities initiated, with the goal of allowing more efficient power system sharing between Nikaitchuq and Oooguruk.
When the POD was filed, Eni said Nordic Calista Rig 4 was cold stacked, with no plans for new wells at Oliktok Point. Doyon 15 was also cold stacked, but Eni said it anticipated the rig would be warmed up and three new wells and one lateral drilled at Nikaitchuq.
Oooguruk
Eni filed the 17th plan of development for Oooguruk last year, covering Oct. 1, 2023, through Sept. 30, 2024.
The Oooguruk unit was formed in 2003, with leases at the southern end removed in 2018 and a current area of some 35,285 acres on 16 leases. Eni became operator in 2019. Primary recovery at Oooguruk is waterflood.
There are three participating areas, Nuiqsut, Kuparuk and Torok, with production commingled on the surface and processed at the ConocoPhillips Alaska-operated Kuparuk River unit.
There is an offshore artificial gravel island, the Oooguruk Drill site, just east of the Colville River Delta in Harrison Bay, with production delivered to the Oooguruk Tie-in Pad via a buried subsea flowline bundle and onshore flowlines, where it is metered and then transferred to Kuparuk River unit facilities for final processing and transportation to the sales line.
Eni said the original plan was to use electrical submersible pump completions at Oooguruk "to maximize drawdown and minimize gas lift and the associated KRU and hydraulic back-out effects," but most wells currently require gas lift. The gas lift combined with Oooguruk formation gas "significantly impacts the flowline pressure, reducing overall flow rates, and generating significant back-out costs at KRU, primarily constrained by gas processing capacity," the company said, which means not all Oooguruk wells can be produced concurrently using gas lift.
Recent workover campaigns have involved installing or replacing failed ESPs.
