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Vol. 23, No.45 Week of November 11, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

The Producers 2018: Hilcorp staggering its efforts on the North Slope

Company planning large program at Milne Point, lesser programs at Duck Island and Northstar; Liberty gets big boosts

Eric Lidji

for Petroleum News

Hilcorp Alaska LLC is entering the final months of an extension of its plans of development for its three active North Slope units. The administrative quirk is intended to shift the annual reporting schedule for those units to a different quarter of the calendar.

As a result, the company reported its planned activities shortly before the start of the development year in early 2017 and again in a series of amendments this past summer.

The plans and their amendments show that the company is advancing its development activities at different rates at its four North Slope properties. The Milne Point unit is receiving the largest investment and will host the greatest amount of drilling, followed by the Endicott field at the Duck Island unit and then the Northstar unit. The Liberty project remains in pre-development but is gaining momentum again after several years of delays.

Hilcorp acquired a major stake in the North Slope in late 2014, though an acquisition from BP Exploration (Alaska) Inc. and has since expanded its interest in those holdings.

Milne Point

Hilcorp fell short of its targets for the Milne Point unit during the 2017 development year but surpassed the pace of development activity it had reported in recent years at the unit.

In its 36th plan of development for the Milne Point unit, running through the year ending July 31, 2018, Hilcorp told the state it would drill as many as 18 wells. The proposed program included 10 wells at F pad, five wells at L pad, two wells at E pad and one well at C pad. The 18-well program was designed to target several intervals throughout the Schrader Bluff formation, as well as targeted intervals in the Sag River and Kuparuk formations. The program also included workover activities at as many as 16 wells.

According to information from the Alaska Oil and Gas Conservation Commission, Hilcorp drilled 12 development wells at Milne Point in the year ending July 31, 2018.

The program started with the C-45 producer drilled into the Kuparuk formation in October 2017. The company drilled the L-51 producer, L-52 injector and L53 producer between late October 2017 and mid-January 2018 and the L-54 producer, L-56 producer and L57 producer in June and July 2018. The company drilled the F-106 injector, F-107 producer, F-108 injector, F-109 producer and F-110 injector between mid-February 2018 and mid-May 2018. The L pad and F pad wells were drilled into the Schrader Bluff formation. As of mid-September 2018, the company had not permitted the two proposed E pad wells.

As part of its 36th plan of development, Hilcorp asked the state to extend the plan of development through Jan. 12, 2019. The extension would allow the company to shift its reporting schedule to later in the year. The state agreed but required the company to file an amendment that reported on its development activities for the latter half of 2018.

In the subsequent amendment, Hilcorp proposed work at as many as 22 wells - a combination of drilling and workovers - at Milne Point by January 2019 using the Doyon 14, Innovations and ASR1 rigs. The amendment proposed work at six L pad wells, four E pad wells, three Moose pad wells and as many as eight undefined workover projects.

The L pad wells include two Kuparuk producers, one Sag River producer and converting two producers to injectors. The E pad wells include two Schrader Bluff producers, one Schrader Bluff injector and converting one producer to a new water well. The Moose pad wells include one Schrader Bluff producer, one disposal well and one water well.

The amendment also provided updates about several facility projects.

By the January deadline, Hilcorp expects to install and commission the Titan 130 turbine and associated infrastructure at the L pad. The company applied in late 2017 to expand the pad to accommodate the added infrastructure and as many as five new development wells. The expansion added 2.29 acres of gravel to three sections of the existing pad.

The company expects to complete facility upgrades at J pad and A pad by the January deadline. The work involves installing polymer injection facilities at the two pads. The company is also planning electrical upgrades at E pad during the remainder of 2018.

Aside from the ongoing drilling activities at existing pads, the biggest development at Milne Point is the ongoing work on the Moose pad. The 44-well pad would be the first new pad at the unit since 2002. It would target oil in the Kuparuk and Schrader Bluff formations at the western end of the unit and could eventually accommodate 50-70 wells.

In addition to Moose pad construction, Hilcorp commissioned the custom-built Innovation rig, touted as the lightest modular rig on the North Slope. The rig can drill closely spaced wells, allowing it to also operate at Endicott and at the Northstar unit.

In previous announcements, Hilcorp said it planned to begin drilling activities at Moose pad in 2018 with first oil expected by the end of the year. As of mid-September, the company had yet to receive AOGCC drilling permits. The most recent permitting activity at Moose pad involved a pipeline tie-in pad and access road requested in May 2018. In the amendment, Hilcorp said it expected to commission the new pad by January 2019.

Duck Island

This past year was the first where Hilcorp conducted drilling activities at the Endicott field of the Duck Island unit as part of its ongoing development work at the unit.

The company initially announced plans to drill at least one and as many as seven sidetracks, according to a plan of development for the year ending July 31, 2018.

According to AOGCC records, the company drilled the SDI 3-23A sidetrack in October 2017. The well was the first at the Duck Island unit since BP Exploration (Alaska) Inc. drilled the Duck Island Unit SDI 4-04A/T30 production well in 2009.

Hilcorp also drilled the MPI 2-66A sidetrack in September 2018, during the current development year. The company also permitted the SDI 4-26A sidetrack in late July 2018 but had not yet completed the well by mid-September, according to the AOGCC.

Hilcorp expanded its ownership of the Duck Island unit in June and July 2018 by acquiring the outstanding interest of ExxonMobil in the unit and its main pipeline.

Hilcorp requested that the current Duck Island unit plan of development continue through Feb. 12, 2019, to allow the company to shift its reporting schedule to later in the year. The state approved the request but required the company to prepare an amendment covering its activities for the latter half of the year. In its amendment, the company said that it was not planning any activities outside of the scope of the original plan of development.


Hilcorp has been focusing on workover activities, rather than drilling, at the Northstar unit. But the company reduced its activities somewhat in the current development year.

In the 13th development year, ending July 31, 2017, the company performed six workover projects at four wells in three participating areas: Northstar, Fido and Hooligan.

The company also completed several major facility projects.

The 14th plan of development, through July 31, 2018, included no drilling activities and a workover project to recomplete the NS-15 well, in addition to several facility projects.

Hilcorp requested that the Northstar unit plan of development continue through Feb. 12, 2019, to allow the company to shift its reporting schedule. The state approved the request but required the company to provide an amendment covering its later activities.

The amendment to its plan of development, submitted in August 2018 and accounting for the extension period, included projects at the NS-08, NS-13 and NS-18 wells. The projects involve acidizing Kuparuk C formations at NS-08 and NS-18 to remove wellbore damage and acidizing an existing injection well, recompleting the NS-13 Ivishak well to a Kuparuk well, and converting an existing Kuparuk production well into an injector.


Hilcorp is operating the Liberty project on behalf of partner BP. The long-delayed and oft-revised project is targeting a resource in the federal waters of the Beaufort Sea.

The project received two big boosts over the past year.

The first came when the Trump administration cancelled an Obama administration order that had withdrawn the Chukchi Sea and portions of the Beaufort Sea from drilling.

The second came in early September 2018, when the U. S. Bureau of Ocean Energy Management issued its final environmental impact statement for the project, accepting a plan by Hilcorp to develop Liberty from a gravel island some five miles offshore.

Hilcorp is looking to begin construction on the 9.3-acre island in late 2019. A 16-well development program would begin sometime after, with first oil as early as 2022.

The company expects the field to come online between 10,000 and 15,000 barrels per day, peaking at 60,000 to 70,000 bpd within two years. The company also expects the field to produce as much as 120 million cubic feet of natural gas per day.

The plan for the gravel island mimics an earlier development plan by BP from the late 1990s. BP later revised the project in favor of an ultra-extended reach drilling plan.

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