Hilcorp Alaska LLC is planning a modest development program at its federal Cook Inlet units this year, with the exception of a sizeable program planned for the Kenai unit.
The local subsidiary of the Texas independent operates six units in the Cook Inlet region overseen by the U.S. Bureau of Land Management: the Beluga River unit, the Birch Hill unit, the Swanson River unit, the Beaver Creek unit, the Sterling unit and the Kenai unit.
Beluga River
Hilcorp has no firm drilling plans at Beluga River for the coming year, but it has been evaluating potential drilling locations. The company assumed control of the legacy Cook Inlet unit in late April 2016, after acquiring an interest from ConocoPhillips Alaska Inc.
The company did not drill any wells or sidetracks at the unit during its first year as operator. But it conducted a small workover program at the unit in 2016, temporarily bringing the 244-04 well online to diagnose a range of maintenance requirements and evaluating the 224-34 and 214-26 wells as candidates for artificial lift in the future.
The unit produced 17.427 billion cubic feet in 2016, down from 21.219 bcf in 2015.
Birch Hill
Hilcorp still intends to restart production from the Birch Hill unit, although the plan depends upon completing construction of a surface infrastructure program at the unit.
The program revolves around a plan to remove a plug from the existing Birch Hill 22-25 well, conduct a workover and conduct various well tests. The project requires construction of a snow road and mobilization of a workover rig and testing equipment.
If the well proves to be non-commercial, Hilcorp would plug and abandon the well. If the test is successful, Hilcorp would build a production facility and gas gathering lines to bring the unit into production. The project would take between six and 12 months, with half devoted to planning, permitting and design and the rest going toward construction.
But the entire project, including both the test and the potential development, is dependent on “gas market requirements and favorable winter weather conditions,” Hilcorp wrote.
Swanson River
Hilcorp is planning a small development program at the Swanson River unit.
The company plans to drill one well and perform one workover during the coming development year, which runs from April 2017 through the end of March 2018.
The company plans to drill the SRU 241-33 well and perform a workover on the SCU 44-33 well during the third quarter of this year. (The Swanson River unit and Soldotna Creek unit were originally separate administrative entities but have been managed together since 1963, and there are still well names reflecting those original unit designations.)
The company expects other projects to arise during the year and is noted that as many as four well or sidetrack options were available.
To that end, Hilcorp is continuing work on a field-wide shallow gas survey. The goal is to identify the remaining reserves above the Hemlock formation. A list of sidetrack candidates “will be vital for economically reaching these smaller/ less economic targets.”
The propose program for the coming year is a reduction from last year.
Hilcorp drilled two wells - SCU 322C-04 and SCU 31B-04 - and completed three workover projects - SCU 33-33, SRU 14B-27 and SCU 41A-08 - at the Swanson River unit under its previous development plan, which ended on March 31, 2017.
The unit entered 2016 producing 1,970 barrels of oil and 9.9 million cubic feet of natural gas per day and finished the year producing 1,935 barrels of oil and 7.9 million cubic feet of natural gas per day. The unit entered 2015 producing 3,600 barrels of oil equivalent per day and finished 2015 producing 3,250 barrels of oil equivalent per day. The different units provided by the company from one year to the next make comparisons difficult.
Beaver Creek and Sterling
Hilcorp is also not planning any wells or sidetracks at the Beaver Creek unit this year but expects to conduct a rig workover targeting the Sterling B3 interval at the BCU-25 well.
The company did not drill any wells or sidetracks at the Beaver Creek unit in 2016 but performed one rig workover targeting five Tyonek intervals at the BCU-23 well.
The newest Sterling unit plan of development was not available for review. In April 2016, the state approved a limited plan of development through September 2016, rather than through March 2017. The newest plan of development is still being reviewed.
Kenai
Hilcorp is planning a considerable development program at the Kenai gas field.
The company intends to drill as many as six wells at the unit over the coming year, including at least four wells into the Deep Tyonek participating area and two wells into the Beluga/Tyonek gas pool. The company is also considering two other well projects.
The upcoming development program also includes as many as 25 workover projects at the unit. The program includes as many as 10 coil tubing workovers, five rig workovers and 10 e-line recompletions with an emphasis on restoring older wells to production.
By comparison, Hilcorp did not drill any wells at the unit under its 2016 plan of development and performed 12 workover projects, many of which added production.
The Kenai unit produced 47.7 million cubic feet per day from its producing (meaning: non-storage) wells in 2016, down from 51.1 million cubic feet per day in 2015.
