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Hilcorp continuing west side studies Committed to restarting Stump Lake unit by third quarter or plugging and abandoning wells in 2018; field shut in since 2012 ERIC LIDJI For Petroleum News
Hilcorp Alaska LLC is planning a comprehensive study of its west side Cook Inlet fields.
The local subsidiary of the Texas based independent operates five units at the northern end of the west side of the basin: Ivan River, Lewis River, Pretty Creek, Stump Lake and Beluga River. While the first four of those are small and managed by state officials, the fifth is among the largest and most important in the region, and is federally managed.
The Ivan River, Lewis River, Pretty Creek and Stump Lake units have been in a holding pattern since Hilcorp acquired them from Unocal in early 2012. The company has devoted fewer resources to those four units than to other corners of its vast portfolio.
The holding pattern will continue this year, according to plans of development filed with the state officials earlier in March. Hilcorp did not drill or workover any wells at those four units in 2016 and is not planning any drilling or workover activities for 2017.
But the regional study could determine the direction of operations going forward.
The review would have the greatest impact on the Stump Lake unit, which has been shut-in since 2012 due to mechanical issues. The state previously required Hilcorp to conduct a field study. After completing that assessment, Hilcorp “concluded that the conventional life of this legacy field has reached its economic limit,” the company wrote in a plan of development submitted to the Alaska Department of Natural Resources on March 1.
Even so, Hilcorp is including the Stump Lake unit in the regional study and has committed to restarting production from the unit by the third quarter of this year.
“If unit production is not resumed by said date, Hilcorp commits to plugging and abandoning of SLU 41-33RD,” the company wrote in its plan of development. The SLU 41-33RD well was the sole producing well at the unit in earliest years. But the well was taken offline after mechanical issues arose when Hilcorp attempted to add perforations in 2012. The plugging and abandoning work would occur during the 2018 plan year.
In its 2016 plan of development for the Stump Lake unit, Hilcorp said that its acquisition at the Beluga River unit could create new opportunities for reviving the otherwise uneconomic Stump Lake. Without such “critical mass” of projects in the region, “the economic life of the Stump Lake unit has likely passed,” the company added at the time.
The state is reviewing the completeness of the plans.
While the state manages the four smaller units, the U.S. Bureau of Land Management oversees the Beluga River unit. Its plan of development is typically due in early May.
Lower production The other three west side units could also use some assistance.
The Ivan River unit produced 591,000 cubic feet of natural gas per day in 2016, down from 3 million cubic feet per day in 2015. The Lewis River unit produced 140 million cubic feet total in 2016, down from 206.5 million cubic feet total in 2015. The Pretty Creek unit produced 300,000 cubic feet total in 2016, equal to 2015 production.
Pretty Creek also includes a gas storage operation. Hilcorp injected 379 million cubic feet into the unit in 2016 and withdrew 232 million cubic feet. By comparison, the company injected 291 million cubic feet from the unit and withdrew 528 million cubic feet in 2015.
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