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Hilcorp at work at Duck Island, Northstar Plans of development show early production increases as Hilcorp assumes responsibility for 2 North Slope units it acquired from BP Eric Lidji For Petroleum News
Hilcorp Alaska LLC is bringing its Cook Inlet mentality to its new North Slope assets.
In its first full quarter as operator, the Texas-based independent conducted considerable restoration work at the Duck Island unit and the nearby Northstar unit, according to plans of development filed with the Alaska Division of Oil and Gas earlier this year.
Toward the end of 2014, Hilcorp closed on an acquisition of four BP Exploration (Alaska) Inc. properties on the North Slope. The deal gave Hilcorp 100 percent working interest and operatorship of Duck Island and Northstar, 50 percent working interest and operatorship in the Milne Point unit and 50 percent working interest in the Liberty field.
The new plans of development are the first Hilcorp has filed for Duck Island and Northstar since assuming responsibility for the units north and northeast of Prudhoe Bay.
The next plan of development for Milne Point will be due this fall. Hilcorp recently began submitting permitting documents for Liberty to the appropriate federal regulators.
After Hilcorp arrived in Cook Inlet through two major acquisitions in 2011 and 2012, the company impressed the local oil and gas industry by dramatically increasing production rates at existing fields, primarily through restoration work on aging or damaged wells.
The company appears to be undertaking a similar strategy on the North Slope.
For example, the Duck Island unit produced 208,170 barrels of oil in October 2014, before Hilcorp assumed operations. This January, the unit produced 258,350 barrels, down from a high of 274,647 barrels in December 2014. The company said it “intends this same progress to continue” through the current reporting period of May 2016.
Duck Island The Duck Island unit includes three participating areas - the main Endicott field, Eider and Sag Delta North - and operations at the Minke tract-based at ADL 34633.
At Endicott, Hilcorp is currently using miscible water alternating gas flooding for enhanced oil recovery. The company intends to conduct a monitoring campaign this year to track the movement of the injection fluids through the reservoir. The results of the monitoring will determine whether Hilcorp will expand the process “to new patterns in the upper subzones” or whether an alternative enhanced oil recovery process is viable.
Hilcorp is also currently performing engineering studies to determine whether it should inject water into the gas cap at Endicott. Those studies are likely to continue into 2016.
This summer, Hilcorp expects to begin working over existing Endicott wells. BP last worked over Endicott wells in 2013, at the end of a five-year renewal campaign. Hilcorp is also considering conversions, sidetracks and maintenance activities this year, although these activities have yet to be sanctioned and depend on economics and current studies.
Hilcorp has no immediate plans for sidetracks or workovers at Eider, Sag Delta North or the Minke tract, although the company said it would look for opportunities at all three.
Northstar Hilcorp also expects Northstar production to be “maintained or increased” this year through a combination of maintenance activities and restructuring of existing wells.
The company said it would achieve this goal “through well intervention projects, infrastructure and facility repairs, and other optimization opportunities as they arise, including the evaluation of shut-in wells for potential return to service or utility.” Since taking over the unit, Hilcorp has returned the NS-33A and NS-22 wells to production.
The unit produced 11,100 barrels per day during the first quarter, according to Hilcorp.
This year, the company plans to recomplete the NS-18 Ivishak producer to target the Kuparuk sands, recomplete the NS-24 Ivishak producer to test the Sag reservoir and fix a surface casing leak at the NS-22 well. The company also plans to convert the NS-28 well to a gas injector targeting the Ivishak, which the company said would optimize the horsepower of existing compressors by reducing injection pressure into the field. The company will soon start a reservoir simulation model to optimize injections.
Optimizing the injection strategy for the unit gained importance toward the end of last year when Hilcorp discontinued natural gas imports from Prudhoe Bay and began relying on gas produced at Northstar, using some 12 million cubic feet per day in 2015. BP had been investigating the possibility of converting the field to self-sufficiency for gas.
Although Hilcorp has presented no definitive plans, the company suggested it would pursue exploration that could potentially lead to new developments in the unit. That work would depend on “equipment availability, plant capacity, and commercial viability.”
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