Providing coverage of Alaska and northern Canada's oil and gas industry
February 2019

Vol. 24, No. 6 Week of February 10, 2019

Hilcorp kicks up Milne activity; 29 wells planned, 16 at Moose Pad

Kristen Nelson

Petroleum News

Hilcorp Alaska had a busy year in 2018 at the Milne Point unit it operates on the North Slope, and 2019 is going to be even busier, according to a unit plan of development approved late last year by the Alaska Division of Oil and Gas. Hilcorp is the Milne Point operator, and 50 percent working interest owner - BP Exploration (Alaska), the previous operator, retains a 50 percent working interest ownership in the field.

The 37th plan of development for the field was effective Jan. 13 and runs through Jan. 12, 2020, a change from the previous POD which ran through August, a change Hilcorp requested to align the POD with the calendar year.

The unit produces from the Kuparuk reservoir in the Kuparuk participating area, the Schrader Bluff reservoir in the Schrader Bluff PA, the Sag River reservoir in the Sag River PA, and a number of tract operations: C-15A, S-90, C-23, K033; and several Ugnu tract operations, MPS-37, MPS-39, MPS-41 and MPS-43.

The most recent production numbers available, those for December from the Alaska Oil and Gas Conservation Commission, show Milne production at 21,075 barrels per day from 119 wells, with production almost equally split: 10,558 bpd from the Kuparuk and 10,517 bpd from Schrader Bluff. While there are six wells into the Ugnu listed, there is no Ugnu production.

37th POD

During the previous POD, the 36th, Hilcorp had anticipated drilling up to 18 new wells; through the October date on which the company submitted its new plan, 12 new wells had been drilled, the company said, with six more projected to be completed through the end of the 36th plan.

The company also anticipated completing as many as 16 workovers, with 14 completed prior to submission of the new plan, and three more expected to be completed by the end of the 36th POD.

In addition, Hilcorp planned several major facility projects during that POD, including addition of a large power generator, but said it determined that rather than installing one large generator at the field’s central facility, “a distributed power approach best addressed our power generation needs.” So instead of a single large generator, the company added a smaller 15-megawatt Solar Titan 130 unit along with infrastructure to handle up to two additional units. The company said it pursued the distributed power approach because it was near current loads and expansion; it allowed investment to be made incrementally; and additional generation can be added as needed.

Moose pad

The division said that under the 36th POD, “Hilcorp procured, constructed, and installed surface facilities and pipelines for its Moose Pad,” with the expectation that it would be commissioned before the end of the 36th POD period.

Hilcorp said it anticipated completing a Moose Pad water disposal well and a Moose Pad Schrader Bluff producer prior to the end of the 36th POD.

David Wilkins, the company’s senior vice president for Alaska, described the company’s work at Moose Pad to the Resource Development Council’s annual conference in November. It is the first new well pad built at Milne Point since 2002, he said, and can accommodate 50 to 70 wells.

Unusually for the North Slope, this pad includes processing facilities on the same pad as the wells, he said.

Pad construction began in 2017 and with a 3-mile access road has cost $120 million, including installation of a 15-megawatt turbine generator plant. The Moose Pad processing facility can handle 85,000 barrels of fluid per day and Hilcorp anticipates a total price tag of some $400 million for the development, with potential recovery of some 60 million barrels of oil, a development cost of $6 to $7 per barrel, Wilkins said.

37th POD

Hilcorp anticipates drilling as many as 29 new wells during the 37th POD period, it told the division, with potential drilling candidates including 16 Moose Pad Schrader Bluff wells: two water source wells; six producers; seven injectors; and a produced fluids disposal well.

Another Schrader Bluff drilling program would be at E Pad, with as many as eight wells planned, with wells E-35 through E-42 alternating production and injection wells, with four of each planned.

Two Moose Pad Kuparuk producing wells are planned, as well as a Kuparuk producing well at L Pad.

Sag River producing wells are planned for L Pad and F Pad, one well at each pad.

Two S Pad Ugnu producing wells are also included in the 37th POD. Milne Point currently has no Ugnu production, although AOGCC records show there was production from a single well in 2003 and 2004, peaking at 152 bpd; the pool was then shut-in. Regular production resumed for a few months in 2011, peaking at 459 bpd, and was attempted again for a few months in 2012 and again in 2013, when the pool averaged 165 bpd from a single well.

Hilcorp also anticipates as many as 16 well workovers during the 37th plan.

Major facility projects

Facility projects under the 37th POD may include a number of activities, the company said: routine facility maintenance and minor equipment replacement; mechanical integrity activities including facility piping, vessels, tanks, and valve inspection and repair; pipeline and flowline maintenance pigging; completion of facility upgrades as needed to support drilling from existing pads; commission and startup of the Moose Pad in early 2019; commission and startup of Solar Titan 130 power generator and associated infrastructure; well tie-in activities at Moose Pad and existing well pads; facility upgrades and infrastructure for Ugnu heavy oil development; possible additions to Moose Pad for polymer injection; purchase second of as many as three Solar Titan 130 generators as continuation of phased power upgrade; possible permitting and development of an additional well pad; and developing a new E pit gravel mine site next to the existing E pit.

Hilcorp said other projects may include, but are not limited to, adding additional compression at existing surface facilities to support existing wells and increased production through Hilcorp’s workover and drilling program; and increasing capacity of existing surface equipment at unit pads for processing by adding additional line heaters, gas dehydration modules, and/or liquid separation vessels with associated piping and controls.

Discovered in 1969

Milne Point was discovered in 1969 in the Standard Oil Company of California Kavearak Point 32-25 well, and the field was initially delineated and then developed by Conoco Inc. beginning in 1980, with regular production beginning in 1985 from the Kuparuk River oil pool.

BP became operator of the Milne Point unit in 1994 and began aggressive development.

Hilcorp became operator at Milne Point in 2014, with BP retaining a 50 percent working interest.


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