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Hilcorp focuses offshore in inlet
After poor economics restrained activity at its offshore units in 2016, Hilcorp Alaska LLC is planning a fairly robust development program for the area this coming year.
In the waters of Cook Inlet, the local subsidiary of the Texas based independent operates the North Cook Inlet unit, the Granite Point unit, the Middle Ground Shoal unit and the associated Trading Bay unit, North Trading Bay unit and McArthur River field.
Hilcorp recently submitted plans of development for all those units to the Alaska Department of Natural Resources. The state is reviewing the plans for completeness.
North Cook Inlet Hilcorp is in the early stages of planning for its newly acquired North Cook Inlet unit, although what little the company has offered in its plan of development is intriguing.
ConocoPhillips Alaska Inc. submitted its most recent a plan of development for the unit in September 2016, around the time it was finalizing a deal to sell the unit to Hilcorp.
Hilcorp recently submitted a revised proposal, which has yet to be approved.
Under the program, Hilcorp would not drill any wells or sidetracks nor would it perform any workover operations at the North Cook Inlet unit this year. But the company would conduct a comprehensive field study for future activities, including oil production.
The North Cook Inlet unit is a legacy natural gas producer in the Cook Inlet region and has historically been the most important supplier of the semi-idle Kenai liquefied natural gas export terminal. But several operators have considered the possibility of pursuing deeper oil targets at the unit, most recently the independent Buccaneer Energy Ltd.
In suggesting the possibility of oil development, Hilcorp noted that the Tyonek platform currently includes no oil processing facilities, nor any oil pipeline to shore. As such, any oil development would not only be expensive, but would also be fairly time-consuming.
This coming year, Hilcorp also plans install new compression at the unit.
North Cook Inlet produced 13.8 million cubic feet of natural gas per day in 2016.
Granite Point To the southwest of North Cook Inlet, Hilcorp operates the Granite Point unit.
While the company did not drill any wells at the unit in 2016, it plans to drill three sidetracks this year - the GP-11-24RD, GP-24-13RD2 and MUCI-02RD sidetracks.
All three sidetracks would target the Tyonek C7 sands from the Granite Point platform.
The company performed a workover on the AN-11RD well in 2016 but was unable to return the well to production. The company is planning no workovers at the unit this year.
The Granite Point unit produced 780.6 million cubic feet of natural gas and 948,200 barrels of oil from its three platforms - Granite Point, Anna and Bruce - in 2016. Those are declines from 825.7 million cubic feet of gas and 968,100 barrels of oil in 2015.
Middle Ground Shoal Under previous operators, the current Granite Point unit had been two separate fields.
In a similar fashion, Hilcorp recently consolidated the North Middle Ground Shoal field, Middle Ground Shoal field and South Middle Ground Shoal unit into the new Middle Ground Shoal unit. The company argued that consolidation would maximize operations at platforms A and C and promote opportunities at the shut-in Baker and Dillon platforms.
Platforms A and C produced 158.4 million cubic feet of natural gas and 680,900 barrels of oil in 2016. The two platforms produced 47 million cubic feet of natural gas and 219,700 barrels of oil in 2015 - a sharp rise in gas production and a steep fall in oil production.
The increase can be traced to eight workover projects. The company added perforations at the A11-01, A12A-01 and A24-01LE wells at platform A, and performed a variety of projects at C21-23, C22-26RD, C13-13LN, C31-26RD and C42-232 at platform C.
Hilcorp processed a 2015 3-D seismic program last year and plans to continue analyzing the results this year with the plan of identifying future drilling or workover projects.
The company is planning no drilling or workover activities at platform A this year but could sidetrack three platform C wells - C23-26RD, C33-26RD and C34-26RD - later this year or in 2018. The company is planning no work at the Baker or Dillon platforms.
Trading Bay Hilcorp operates a third cluster of fields immediately west of Middle Ground Shoal - the Trading Bay unit and McArthur River field and the North Trading Bay unit.
At the Trading Bay unit, Hilcorp plans to sidetrack the A-04RD well from the Monopod platform into the nearby North Trading Bay unit. The sidetrack would target the Hemlock and Tyonek G-zone. If successful, it would restore North Trading Bay to production.
The plan would require some administrative changes, such as a revision of the unit boundaries or metering requirements. The plan leaves open the question of what to do with the shut-in Spark and Spurr platforms at North Trading Bay. There were discussions in previous years of dismantling the platforms. Hilcorp does not believe it is economic to restart production from the two platforms, but does believes that they have value “to support ongoing evaluation and analysis” of potential development opportunities.
In 2016, the company sidetracked the A-27RD2 well but deferred plans for drilling the A-20RD2D and A-26RD wells pending a further review of seismic information. The company also deferred three of the four workover projects it had planned for 2016.
The Trading Bay unit produced 866,000 barrels of oil and 1.336 billion cubic feet of gas in 2016, down from 1.33 million barrels of oil and 2 billion cubic feet of gas in 2015.
At the McArthur River field, the company is planning to drill as many as three grassroots wells and four sidetracks this year. The three wells - M35, M36 and M37 - would target the upper West Foreland formation from the Steelhead platform. The four sidetracks - K-06RD2, K-24RD3, K-03RD2 and K-26RD2 - would be at King Salmon platform wells.
In 2016, the company sidetracked the shut-in K-10RD well, the K-06RD well and the K-10RD well. A plan to sidetrack the K-25RD well was cancelled due to low quality rock.
The company also worked over one well at the Dolly Varden platform, four wells at the Grayling platform, two wells at the Steelhead platform and three wells at the King Salmon platform. The work mostly involved replacing electric submersible pumps.
The field produced 1.797 million barrels of oil and 8.54 billion cubic feet of gas in 2016.
- ERIC LIDJI
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