State OKs Milne Point S Pad expansion

Kay Cashman

Petroleum News

On March 27 Alaska’s Division of Oil and Gas approved Hilcorp Alaska’s proposed Milne Point unit S Pad expansion following a 30-day public comment period on the North Slope project, effective immediately.

The Jan. 29 application from Hilcorp came in the form of a unit amendment application to the 38th plan of development, which runs from Jan. 13 through Jan. 12, 2021.

The pad expansion allows Hilcorp to drill 10 new wells to increase production from the Ugnu reservoir.

An estimated 18 billion barrels of heavy oil are known to exist in the shallow Ugnu formation above the reservoir rocks of major oil fields on Alaska’s North Slope. In a Feb. 26 presentation to a meeting of the House and Senate Resources committees David Wilkins, senior vice president of Hilcorp Alaska, said conventional Ugnu wells at Milne Point alone could produce a billion barrels of recoverable oil.

The Milne Point field has four oil pools; starting with the shallowest, they are Ugnu, Schrader Bluff. Kuparuk River and Sag River. Ugnu oil is the thickest, coldest and most difficult to extract, making it expensive to develop and too viscous to flow unaided through a pipeline, while also being the least valuable of all North Slope crudes.

The work to expand S Pad, which is approximately 27.5 miles northwest of Deadhorse, involves discharge of 16,000 cubic yards of gravel fill into 2.04 acres (approximately a square shape of 328 feet by 319 feet with a cut out for an existing rectangular pad 179 feet by 96 feet toe-to-toe) of Palustrine emergent wetlands, per a U.S. Army Corps of Engineers 30-day public comment notice for the project issued March 9.

In its application to the Division of Oil and Gas, Hilcorp’s proposed schedule for the project was to place gravel for the pad extension starting March 20, finishing it by May 1. Drilling of the 10 new wells was to begin next and be done on May 1, 2021.

June 1 was the proposed start date for the installation of piping, tie-ins and associated infrastructure, with completion by July 1, 2021.

Hilcorp said half the new wells would be “Jet Pump producers and half injectors as currently planned.” But as drilling continued results might “necessitate adjustments to the pumping mechanism or ratio of producers to injectors.”

Additional infrastructure, “including a traditional test separator, heaters, polymer facilities, and pump drives, may be installed on pad, but these will be permitted separately once we have the design finalized,” the company told the division.

Hilcorp took over operatorship of the mature Milne Point oil field in November 2017 from BP Exploration (Alaska).