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New inlet player Houston-based, privately held Hilcorp buying Chevron’s Cook Inlet assets Kristen Nelson Petroleum News
The familiar logos long associated with Union Oil Company of California and Chevron will soon be absent from Alaska’s Cook Inlet, replaced by a new logo, that of Houston-based Hilcorp Energy Co.
Chevron and Hilcorp said July 19 that Hilcorp is acquiring Union Oil’s Cook Inlet assets.
Financial terms were not disclosed. The transaction is expected to close by year end pending customary regulatory approvals.
Assets in the sale include Union Oil contracts and interests in the Granite Point, Middle Ground Shoals, Trading Bay and MacArthur River fields; interests in 10 offshore platforms; interests in onshore gas fields including the Ninilchik unit and the Beluga River unit; and two gas storage facilities.
Current net production from the assets is some 3,900 barrels of oil and 85 million cubic feet of natural gas per day.
The sale also includes interests in the Cook Inlet Pipe Line Co. and Kenai Kachemak Pipeline LLC.
Chevron will retain its non-operated joint venture interests on the Alaska North Slope and its 1.36 percent interest in the Trans Alaska Pipeline System.
Hilcorp privately held Hilcorp, founded in 1989, is one of the largest privately held independent oil and natural gas exploration and production companies in the United States. Headquartered in Houston, the company has more than 700 employees and nine operating areas including the Gulf Coast region, the Gulf of Mexico and the Rockies.
Hilcorp operates across the United States, and said in the joint statement with Chevron that it “continues to grow by actively acquiring and exploiting conventional assets while expanding its footprint into a number of new resource plays.”
Hilcorp has been recognized for its progressive culture, values and ethics.
For more information about Hilcorp, go to www.hilcorp.com.
Wagoner: Hilcorp enthusiastic Sen. Tom Wagoner, R-Kenai, said in a statement that he received a call from Hilcorp representatives notifying him of the acquisition.
“Hilcorp is enthusiastic about the opportunities it sees in Alaska, and it has an aggressive plan to invest in required well maintenance and in-field drilling to restore and increase production from existing fields, as well as pursue the many exploration targets it has identified around the Cook Inlet basin,” Wagoner said. “Hilcorp’s entry into Alaska is further confirmation of the fact that tremendous oil and gas opportunities remain in the basin,” the senator said.
Alaska Commissioner of Natural Resources Dan Sullivan said in a statement that he believes the sale bodes well for new exploration and production in Cook Inlet.
While the Kenai Peninsula bids farewell to a longtime corporate neighbor, the commissioner said, with Hilcorp Kenai will gain a company with a strong track record of entering mature hydrocarbon basins and making the necessary investments to produce more oil and gas.
“We are seeing continued interest in the inlet from serious companies. We look forward to Hilcorp’s contribution,” Sullivan said.
The commissioner noted the department’s successful lease sale in the inlet in June and a new oil and gas assessment by the U.S. Geological Survey significantly boosting estimates to undiscovered, technically recoverable gas resources in Cook Inlet.
Hilcorp, which is privately held, did not provide information beyond the joint statement.
The company’s website notes that in September 2010, Hilcorp was “named by the Great Place to Work Institute in conjunction with Entrepreneur as the ‘5th Best Medium Size Company to Work for in America.’”
Hilcorp was recognized by the Houston Chronicle Top Workplaces 2010 as the “Top Midsize Workplace in Houston.”
In its April 2011 issue, the Oil & Gas Financial Journal, in an article based on rankings by IHS Herold Inc., listed Hilcorp as the fourth largest U.S.-based private gas producer and the second largest private liquids producer. In 2010 year-to-date production ranked by barrels of oil equivalent, Hilcorp was third with 28,844,901 BOE and 1,788 wells.
‘Three guys and a telephone’
Who is this company coming to Alaska? On its website Hilcorp describes the company’s beginnings “as the proverbial ‘three guys and a telephone’ trying to make a living in the oil and gas business.”
Since then, the website says, Hilcorp has grown to become one of the largest privately held E&P companies in the U.S.
The company said its business model, “acquire and exploit,” hasn’t changed significantly since it was founded in 1989.
In a CEO message on Hilcorp’s website, Jeff Hildebrand, the company’s founder, president and CEO, cited “world-class employees, legacy assets and a strong balance sheet,” as the reasons for the company’s success.
“We focus on what we do well,” Hildebrand said, listing the company’s core competencies as engineering and geological expertise and operational excellence.
He said the company’s vision is “to be the premier private energy company in the industry.” The company’s mission, he said, is “To efficiently develop energy that would otherwise be lost while providing an enjoyable and challenging work environment where long-term personal wealth can be created.”
Hildebrand said the company maintains a unique culture based on: “leaders who set a clear, compelling direction; engaged employees who work like owners; open and honest communication; programs that recognize high performance; one-of-a-kind employee benefits.”
Long history Chevron acquired the Cook Inlet assets of Union Oil Company of California in 2005 and both companies have long histories in the basin, demonstrated by early discoveries credited to the two.
Chevron (then Standard Oil Company of California) discovered Falls Creek in 1961, the Beluga River field in 1962, North Fork in 1965, Ivan River in 1966 and Stump Lake in 1978.
Union Oil Company of California, then called Unocal, discovered the Kenai gas field in 1959, Sterling in 1961, Trading Bay and MacArthur River in 1965 and Pretty Creek in 1979.
When Chevron announced last fall, Oct. 12, that its Cook Inlet assets were being put up for sale, the company’s Alaska general manager, John Zager said the company was “proud of our legacy and the dedicated and talented workforce that has developed and operated these assets safely and responsibly for many years.”
“We believe that finding a company that views the Cook Inlet as a vital, core assets will benefit employees, the community and the state in the long run,” Zager said.
The company has a workforce of some 450 employees and contractors in Alaska.
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