Providing coverage of Alaska and northern Canada's oil and gas industry
September 2020

Vol. 25, No.37 Week of September 13, 2020

Hilcorp files for Seaview unit formation

Company says goal to put Kenai Peninsula gas field into production this fall; plans second gas development well in fourth quarter

Kristen Nelson

Petroleum News

Hilcorp Alaska began exploring in the Seaview area south of Anchor Point on the Kenai Peninsula in 2015, the company told the Alaska Department of Natural Resources’ Division of Oil and Gas in the plan of exploration which accompanied its July 31 application for formation of the Seaview unit.

The company now has a successful gas well and is working on a gas pipeline linking the Seaview pad site to the Enstar-operated Bailey Street Station some 2 miles away as to moves toward putting the Seaview No. 8 well on production this fall.

The company has already applied to the Alaska Oil and Gas Conservation Commission (see story in Aug. 30 issue of Petroleum News) to put the field into production, as well as applying to the division for a participating area at the field.

Exploration plan

In the exploration plan filed as part of its unit application Hilcorp provided a synopsis of pre-unit exploration activities, beginning with its acquisition of an aerial gravity and magnetics survey in 2015 “in order to understand dry holes in the area”; 20.54 miles of 2D seismic shot in 2016; seven shallow stratigraphic test holes in 2017; and the 2018 Seaview No. 8 exploration well, “which resulted in a Tyonek gas discovery.”

This year the company has applied to the division for both unit and participating area formation.

Work is underway on the pipeline which will connect the drill site with the Enstar line.

Hilcorp plans to drill the Seaview No. 9 well in the fourth quarter of this year or possibly the first quarter of 2021. The well will be drilled to a depth of 6,685 feet measured depth.

Unit proposal

The division said comments on the proposed unit must be received by 4:30 p.m., Oct. 2, with a written decision on the unit to be issued after the close of the comment period.

Hilcorp said the proposed Seaview unit agreement is the state unit agreement, with the addition of an article which makes clear that any future changes to the allocation of production within a unit participating area will be prospective only, with no retroactive adjustments.

“The proposed modification will prevent any potential overpayment to landowners, which would require back payments and reallocation of royalties,” and would require Hilcorp to ask landowners to pay back royalty money already paid, potentially years earlier.

In addition to protecting private landowners from having to pay back overpaid royalties, Hilcorp said, the proposed modification “will also greatly reduce the potential administrative burdens for DNR, Hilcorp, private landowners, and other agencies involved.” The company said the unit proposal also includes modifications proposed by DNR.

The proposed unit includes all or part of potential hydrocarbon accumulations in the Sterling, Beluga and Tyonek formations, Hilcorp said. The unit will include all or portions to two state leases and various unleased state, Kenai Peninsula Borough, Native and private interests.

Total unit acreage is some 2,975 acres. Hilcorp Alaska is the working interest owner in some 2,531 acres, 85.1%; some 443 acres, 14.9% of the unit, are uncommitted.

Petroleum News - Phone: 1-907 522-9469
[email protected] --- https://www.petroleumnews.com ---

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)Š1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law.