Hilcorp Alaska is in the process of buying the North Fork unit and the associated North Fork Pipeline on the southern Kenai Peninsula from Anchor Point Energy, the pipeline owner, and Vision Resources, the North Fork unit owner, with plans to explore for additional gas in the unit.
In conjunction with the purchase, Anchor Point Energy applied to the Regulatory Commission of Alaska in February for a conditional revocation of Anchor Point's certificate of public convenience and necessity for operation of the North Fork Pipeline as a common carrier pipeline.
When the CPCN was issued, the application said exploration was underway east and north of the North Fork unit which could have resulted in transmission of natural gas from multiple shippers. Exploration east of North Fork was unsuccessful and a separate pipeline was built to transport gas from north of the unit.
North Fork Pipeline has never operated as a common carrier, moving only gas from North Fork.
The CPCN was granted because the Department of Natural Resources authorized the pipeline under an AS 38.35 right-of-way lease, requiring that RCA issue the CPCN.
Anchor Point is applying to DNR for conversion of the right-of-way lease under AS 38.35, requiring regulation of the pipeline as a common carrier, to authorization under an easement under AS 35.05.850.
The Feb. 5 RCA application requests that the commission revoke the CPCN on condition that DNR authorize the pipeline under AS 35.05.850.
Hilcorp has agreed to purchase both the unit and the pipeline, but "the purchase is conditioned on conversion of the North Fork Pipeline from a pipeline authorized under an AS 38.35 right-of-way lease to authorization under an AS 38.05.850 easement," and DNR has indicated its consideration of a conversion requires the concurrent application to RCA.
The anticipated closing date for the sale is May 1 and a decision from the commission is requested by April 15, an expedited decision which would allow Hilcorp to explore at North Fork by year end.
North Fork history
Gas has been known at North Fork since the 1960s, but the field lies inland on the southern Kenai Peninsula north of Homer and south of early Kenai Peninsula developments and required pipeline connections for gas delivery.
Chevron, then Standard Oil Company of California, discovered the field in 1965 when drilling for oil at the NFU No. 41-35 well, which tested gas from the Tyonek formation. The unit was formed in May 1965 and was kept alive through a series of negotiated extensions and annual plan of development approvals.
Alaska Oil and Gas Conservation Commission records show production in January and February of 1966 with Gas Pro as the operator, but consistent production did not begin until 2011 after Armstrong Cook Inlet purchased the field in 2007, reentered the NFU No. 41-35, drilled three new wells, acquired 3D seismic over the field and built a 12-mile pipeline to the Enstar line extension to Anchor Point.
In addition to the pipeline from North Fork, production from the field also required extension of Enstar's gas pipeline to Homer from the end of the Kenai Kachemak Pipeline.
North Fork was acquired by Cook Inlet Energy in a deal effective in April 2014 when CIE was a Miller Energy subsidiary. Following bankruptcy in 2016, Miller Energy became a privately held company, Glacier Oil and Gas.
North Fork was acquired by Gardes Holdings in 2020; Vision Operating was the operating company for the unit.
In December, the most recent month for which AOGCC data are available, North Fork averaged 1,692 thousand cubic feet per day, down 17.57% from a December 2023 average of 2,052 mcf per day and down from a December 2018 average of 4,196 mcf per day.
Vision's gas contract with Enstar was amended in June 2023 because Vision was unable to deliver the quantity of gas specified in the 2021 agreement, which called for delivery of 3,000 mcf per day through the first quarter of 2028. The amended agreement dropped the firm gas commitment to 2,000 mcf per day in the second quarter of 2023, with the volume steadily declining to 400 mcf per day in the first quarter of 2028.
In Vision's most recent plan of development, approved in March 2024, the company proposed to enhance production from existing wells, convert a well to water disposal and drill additional wells, but with all operations contingent on favorable market conditions and the ability to raise capital and secure a drilling rig.
AOGCC December production data for North Fork show two wells shut-in and six wells flowing, with all six online for the 31 days of the month.
