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Hilcorp ups production on Slope, in Inlet Wilkins reports on initiatives to increase production from mature fields, touts Liberty project which is in regulatory review Kristen Nelson Petroleum News
Hilcorp Alaska has had production success this year in both Alaska basins where it operates - Cook Inlet and the North Slope. David Wilkins, the company’s senior vice president for Alaska, told the Resource Development Council’s annual conference in Anchorage Nov. 15 that in Cook Inlet the company’s natural gas drilling added rates and reserves that exactly replaced what was sold and oil drilling increased production, while on the North Slope drilling at Milne Point drove up production and Northstar workovers and recompletions replaced declining production by switching formations.
Hilcorp entered Alaska in 2012 in Cook Inlet and since then has invested more than $1.8 billion in drilling. Initially the focus was on drilling a lot of gas wells in Cook Inlet to shore up the gas market, Wilkins said, but in 2017 the company drilled mainly for oil.
He said the company is planning its business around oil prices of $40 to $60 a barrel.
Cook Inlet In Cook Inlet Hilcorp did what it said it would do, Wilkins said, adding rates and reserves to replace the natural gas the company sold. The company entered the year at 225,000 thousand cubic feet per day and plans to end the year at that same level, with eight wells drilled. Hilcorp will continue to run its Cook Inlet business to meet market demand, with 12 million cubic feet per day added and more than 45 billion cubic feet of added reserves.
On the oil side in Cook Inlet, Hilcorp started the year at 12,000 barrels per day, all of which goes to the Kenai refinery operated by Andeavor (formerly Tesoro). Nine oil wells were drilled, adding 3,400 bpd, Wilkins said, and Hilcorp will exit the year with production at more than 15,500 bpd.
There is an exciting new development in upper West Foreland, with three horizontal wells drilled this year, he said, and Hilcorp feels it has tens of millions of barrels to develop from the King Salmon and Steelhead platforms. The company also drilled a couple of wells at Granite Point, and earlier in November had 1,100 bpd from the Tyonek C-5 formation with zero water. Wilkins said the company thinks there’s future development in the Granite Point field drilling tighter formations with horizontal wells and the potential for tens of millions of barrels.
In Cook Inlet Hilcorp is also moving forward with the cross inlet pipeline, a $75 million investment which is a combination of building new pipe and using existing infrastructure, investing in infrastructure for the long term, Wilkins said.
North Slope Hilcorp drilled nine wells at Milne Point and one at Endicott on the North Slope this year, he said, and expects to be at 42,000 bpd by year end, up from 36,000 bpd at the beginning of the year.
At Milne Point the company’s new Moose pad at the far west end of the unit, on the Kuparuk-Milne line, is on schedule and on target with cost. It will be the first new pad at Milne since 2002, and drilling is expected to start in the fourth quarter of 2018, with 50-70 wells planned and first production in November 2018, peaking at 16,000 bpd in 2020. So far the investment is $80 million, and the total cost is estimated in the $300-$400 million range, and with an estimated ultimate recovery of 30-50 million barrels, that puts the per-barrel cost at $10, which is very competitive with other things going on at Hilcorp, Wilkins said.
Also at Milne, Hilcorp plans the first ever polymer flood for the Slope, he said, estimated to increase recovery of viscous oil at Milne by 50 percent over waterflood alone, and an opportunity to recover 30-50 million additional barrels. Wilkins said this is not new, but existing technology that Hilcorp has used in the past in getting efficiencies out of existing fields.
At Northstar Hilcorp is continuing work which BP began, using a mobile workover rig specially designed to easily get in and work in tight well spacing. BP brought Northstar online in 2000, producing from the Ivishak formation, and in 2010 BP recompleted an existing Ivishak into the Kuparuk formation, producing 2,000 bpd. So far 4 million barrels have been produced from the Kuparuk at Northstar, he said.
In 2016 Hilcorp recompleted the NS-18 well, which was shut-in, into the Kuparuk A formation, adding 1,000 bpd, and when perforations into the Kuparuk C were added, 2,000 bpd were produced.
This year another shut-in well, NS-15, was completed into the Kuparuk with 1,800 bpd produced. Wilkins said Hilcorp expects that Northstar will produce as much oil from the Kuparuk formation as it has from the Ivishak, and said Hilcorp expects another 9 million barrels to be developed from existing wells in the Kuparuk formation at Northstar.
The Liberty public comment period closed Nov. 18, and Wilkins encouraged the RDC audience to comment positively on the project, a $1 billion investment with peak production expected at 70,000 bpd and a 20-30 year field life.
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