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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2018

Vol. 23, No.44 Week of November 04, 2018

Hilcorp plans Cook Inlet seismic, exploration over next five years

Kristen Nelson

Petroleum News

Potential Hilcorp Alaska Cook Inlet exploration and development plans for the next five years are listed in an application the company filed with the National Marine Fisheries Service for an incidental take authorization.

Work covered under the application ranges from seismic and exploration drilling to maintenance activities on the company’s existing infrastructure.

The earliest activities described are in federal outer continental shelf waters in lower Cook Inlet: a 3-D seismic survey planned for April through June of 2019, followed by an OCS geohazard survey in the fall of 2019 or the spring of 2020. That work would be preparatory to OCS exploratory wells to be drilled April through October of 2020-22.

Also slated to begin in the spring are an Iniskin Peninsula exploration and development program which would occur in both 2019 and 2020, from April through October.

A subsea well geohazard survey in the North Cook Inlet unit is planned for 2020, followed by well abandonment activity in the unit in May-July.

Also in 2020 a Trading Bay area geohazard survey is planned, followed by Trading Bay area exploratory wells.

Listed for the entire five-year period covered by the application, 2019-24, are platform and pipeline maintenance in middle Cook Inlet, slated for April through October.

An Anchor Point 2-D seismic survey is planned for 2021 or 2022.

Drift River terminal decommissioning is slated for 2023.

Non-lethal unintentional

The application, Hilcorp said in its request, is for “the non-lethal unintentional taking of small numbers of marine mammals incidental to oil and gas exploration, development, and production activities in Cook Inlet” over the five years from April 1, 2019, through April 1, 2024.

Hilcorp said it has been operating in Alaska since 2011 and has interests and operations in more than 29 oil and gas field production facilities in Cook Inlet and on the North Slope. The company also provides operational support to Harvest Alaska, a Hilcorp Alaska subsidiary, for that company’s gas and oil pipelines in the Cook Inlet region.

In Cook Inlet the company’s activities cover some 2.7 million acres, including land and adjacent waters in Cook Inlet - both state and federal OCS waters.

Hilcorp said that prior to its efforts to revive Cook Inlet oil and gas production, aging platform infrastructure in the inlet “was considered to be nearing its functional end of life.” The company said it believes inlet facilities “have decades of economic life remaining while previous operators were actively planning infrastructure removal prior to recent investments.” Hilcorp purchased assets from Chevron and Marathon in 2011 and 2012 and has also acquired XTO’s Middle Ground Shoal field assets and ConocoPhillips’ inlet assets including the North Cook Inlet gas field, Beluga River gas field and Tyonek platform.

In lower Cook Inlet Hilcorp has both federal Bureau of Ocean Energy Management and state leases, acquiring 14 lease blocks in BOEM’s 2017 lower Cook Inlet sale. The company has also been active in annual state leases held by the Alaska Department of Natural Resources, Division of Oil and Gas.

Anchor Point 2-D

Seismic surveys on Hilcorp’s list of planned activities include a 2-D survey in the marine, intertidal and onshore area on the eastern side of Cook Inlet from Anchor Point to Kasilof, with an area of interest some five miles on each side of the coastline. Hilcorp said it anticipates the open water portion of the survey will be done in either 2020 or 2021, April through October, with the survey taking some 30 days in either year.

Hilcorp said the methods for acquiring the seismic would be similar to those employed by Apache Alaska Corp. in 2011 and 2012.

The company said a single vessel can acquire a 2-D source line in some one to two hours, with only a single line acquired in a day, allowing for node deployments and retrievals and intertidal and land zone shot hole drilling. There are up to 10 source lines and the entire operation is estimated to take 30 days to complete, allowing for weather and equipment contingencies.

Hilcorp recently received approval from the state for a plan of operations for a two-well program at its Seaview pad near Anchor River. The company drilled shallow stratigraphic tests in the area in 2017.

3-D seismic

Hilcorp plans to collect 3-D seismic data starting April 1, 2019, over eight of the 14 OCS lease blocks it holds in lower Cook Inlet, an area of some 305 square miles including blocks 6357, 6405, 6406, 6407, 6455, 6456, 6457 and 6458. Hilcorp said it submitted an application for an incidental harassment authorization in late 2017 for a planned survey in 2018 but later withdrew it and now plans for the survey to take place in 2019, with the program anticipated to begin April 1 and last for 45-60 days through June, with the length of the survey depending on weather, equipment and marine mammal delays.

“Polarcus is the recommended seismic contractor,” Hilcorp said, with the 3-D seismic acquired using a specially designed marine seismic vessel towing recording cables with a dual air gun array. There will be one source vessel, one support vessel, one or two chase vessels and potentially one mitigation vessel, with the proposed survey active 24 hours per day. There will be some five hours of data acquisition, followed by 1.5 hours to turn and reposition the vessel. Data will be shot parallel to the shorelines in a north-south direction, keeping recording equipment-streamers in line with Cook Inlet currents and tides and keeping the equipment away from shallow waters on the east and west sides.

The 3-D survey will be followed by geohazard and geotechnical surveys, with the surveys site specific, determined by the number of potential drill sites in an area, and covering less than one lease block in a day.

Exploration wells

The seismic and other surveys on Hilcorp’s OCS blocks in lower Cook Inlet are preparatory to exploration drilling.

Beginning in the spring of 2020, Hilcorp “plans to possibly drill two and as many as four exploratory wells,” pending results of the 3-D seismic survey over its lower Cook Inlet OCS leases, the company said.

“Hilcorp Alaska plans to conduct the exploratory drilling program April to October between 2020 and 2022,” with the exact start date currently unknown and “dependent on the results of the seismic survey, geohazard survey, and scheduling availability of the drill rig.”

Each well is expected to take some 40-60 days to drill and test.

The drilling rig would be similar to the Spartan 151, which can operate in maximum water depths of 150 feet and drill to a depth of 25,000 feet.

In the application Hilcorp said it expected to drill to depths of 7,000 to 16,000 feet, depending on the well, each of which is expected to take 40-60 days to drill and up to 10-21 days of well testing. If two wells are drilled, it would take some 80-120 days to complete the full program; if four wells are drilled, 160-240 days.

Hilcorp was the only bidder in BOEM’s 2017 OCS Cook Inlet lease sale, taking tracts in federal waters off Ninilchik and Anchor Point, a three-tract block southwest of Anchor Point, and a block of eight tracts farther south and in the middle of the inlet.

Late last December Hilcorp applied to BOEM to collect airborne gravity and magnetic data in lower Cook Inlet over an area which generally overlaps the federal OCS waters of the BOEM lower Cook Inlet planning area, including aerial gravity and magnetic survey of all 14 lease blocks Hilcorp acquired in the 2017 sale. Hilcorp also planned to have the surveys run over the Iniskin Peninsula. Fixed-wing aircraft were to be used offshore and rotor-wing aircraft onshore, with data collection expected to take two to three weeks. The survey was originally planned for May, the original permit was for June 1 to Sept. 30, and BOEM said the company notified it on Aug. 17 that they had completed the survey.

Iniskin Peninsula

In the application Hilcorp Alaska said it began baseline exploratory data collection in 2013 for proposed land-based oil and gas exploration and development on the Iniskin Peninsula near Chinitna Bay some 60 miles west of Homer on the west side of Cook Inlet in the Fitz Creek drainage. The 2-D program was proposed over 41 miles between Chinitna Bay and Iniskin Bay.

New project infrastructure proposed for the Iniskin project includes material sites, a 4.3-mile access road, prefabricated bridges to cross four streams, an air strip, barge landing/staging areas, fuel storage facilities, water wells and extraction sites, an intertidal causeway, a camp/staging area and a drill pad, with construction anticipated to start in 2020.

Hilcorp said initial delivery would be by low-draft tug and barge vessels with barge landing/staging areas at Camp Point and Fitz Creek to be used for storage and stockpiling of supplies, equipment and fuel.

An intertidal rock causeway is proposed adjacent to the Fitz Creek staging area to improve accessibility of the barge landing. The causeway would extend seaward from the high tide line some 1,200 feet to a landing area 150 feet wide. Rock fill would be sourced from the Gaikema material site.

“The causeway will enable more consistent use of the Fitz Creek staging area to receive freight and fuel with fewer limitations due to short high tide windows and result in less dependency on the Camp Point staging area,” Hilcorp said in the application, and would also enable quicker response to emergency incidents and reduce the risk associated with materials logistics and fuel deliveries.

When the causeway is no longer needed for the project, rock fill would be removed, allowing wave actions and currents to natural fill and cover the disturbed area.

“The project camp site is located along the historic road alignment at a location where bedrock can be quarried and the pad developed by cutting to grade and utilizing excavated rock for fill,” the company said.

Hilcorp said a dock face would be constructed around the rock causeway so that barges can dock along it.

Existing assets

The application also covers work Hilcorp does on existing facilities, such as verifying the structural integrity of platforms and pipelines within Cook Inlet each year, with routine maintenance activities including subsea pipeline inspections, stabilizations and repairs; platform leg inspections and repairs; and anode sled installations and/or replacement.

Hilcorp also plans to plug and abandon the discovery well in the North Cook Inlet unit, a well drilled more than 50 years ago and planned to be abandoned. The company said it plans to conduct a geohazard survey to locate the well and conduct P&A activities for a previously drilled exploration well. The work is planned for 2020.

The geohazard survey location is a quarter to a half-mile south of the Tyonek platform and will take some seven days.

P&A activities, once the well is located, are expected to take 60-90 days in May through July of 2020. A jack-up rig similar to the Spartan 151 will be used.

Trading Bay, Drift River

Hilcorp said it plans to conduct exploratory drilling in the Trading Bay area and will conduct geohazard surveys over areas of interest prior to drilling, work which is projected for 2019 and expected to take some 30-60 days.

Exploratory drilling and well completion activities will take place in specific areas based on the geohazard survey, with one to two exploratory wells planned in the open water season of 2020.

And if the pipeline from the Drift River Terminal to the Christy Lee platform is abandoned during the 2019-24 period covered in the application, “the Drift River Terminal will be abandoned in place,” Hilcorp said, with no in-water work other than vessels.

- KRISTEN NELSON





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