Producers 2025: Hilcorp Alaska's new drilling

Gas development and new drilling in Cook Inlet will help cushion projected regional supply deficit

Tim Bradner

for Petroleum News

Hilcorp Alaska, the major producer in Cook Inlet, is investing in new drilling and natural gas development to cushion the effects of production declines expected in "legacy" producing fields, which are aging.

The latest is Hilcorp's work to expand drilling and development of smaller gas prospects, mainly onshore, in Southcentral Alaska along with new work at the offshore Tyonek Platform North Cook Inlet field, which produces approximately a third of Hilcorp's gas supplies for the region.

There is also new work being done at the Beluga River onshore gas field on the Inlet's west side, where Hilcorp is the field operator and joint owner with Chugach Electric Association.

Modifications at the Tyonek platform is a major undertaking this year. Hilcorp presented details of the company's plans at the 2025 Alaska Oil and Gas Association conference held in late summer.

The platform was built in 1968 and operates in challenging conditions in Cook Inlet in about 100 feet of water with a 30 ft. to 40 ft. tidal range and tidal currents of 10 knots. The platform produces 35 million to 40 million cubic feet of gas daily, or approximately 14 billion to 15 billion cubic feet yearly.

It has 24 producing wells that were drilled and now operate through the platform's large legs that support it.

The North Cook Inlet field is one of the Inlet's legacy fields and although it is over 50 years old there is more gas that could be developed. The problem is that there is not enough space in the existing platform legs to drill more wells.

Hilcorp has been studying the problem and considering options like structurally expanding the platform to add more legs, building a new platform or installing subsea well tie-backs, or wells drilled with sub-sea flow lines to the platform

Those are costly alternatives and pose environmental issues because of permitting challenges with any new work in the water, which is habitat of threatened Beluga whales.

The company's creative solution to this is to install new conductor pipe, through which wells can be drilled and operated, on the sides of the platform legs. Each conductor pipe can accommodate two wells, so installing one conductor pipe allows for two more producing wells, or two conductor pipes for four new wells. Hilcorp's project installs two conductor pipes.

However, an additional challenge is to protect the new external conductor pipe from the crushing force of winter ice that moves with the tidal currents.

To solve this, Hilcorp has built an "icebreaker," a steel structure that is 50-feet tall and 10-feet wide built with 1-inch steel plate and would be installed to protect the new conductor pipe from the ice forces.

The structure was built in Anchorage. moved to the Tyonek platform and has now been installed. The next step is installation of the conductor pipe.

Drilling is planned to begin in spring, 2026. It's an example of a creative solution to a challenge, Hilcorp said at the AOGA conference.

Other new projects

Work is to begin at Happy Valley on Oct. 20 and be completed in April 2026, the company told the division. What will be built is a new 300 ft.-by-400 ft. gravel pad, the "Happy Valley Middle Pad," as well as a new 3-mile gravel access road, two gas wells drilled from the new pad.

An additional well will be drilled to supply fresh water.

There will also be related facilities such as gas flowlines, electrical instrumentation, separators and other equipment to support production.

On a nearby project Hilcorp also received approval to install a pipeline to produce gas from its new Whiskey Gulch gas project near Anchor Point, also on the Kenai Peninsula.

A 4,000-foot, 6-inch diameter will connect the Whiskey Gulch production pad to a nearby Enstar Natural Gas Co. pipeline.

A third new gas development by Hilcorp will be at the small Pretty Creek gas field on the Inlet's west side. At Pretty Creek Hilcorp will build its new "Diamond" production pad that will support five new production wells, the company said in information supplied to the Division of Oil and Gas.

The location is about nine miles northeast of the Beluga airport.

All three of these projects involve drilling into known gas deposits, which are relatively small, but Hilcorp also plans to drill two new exploration wells to test newly acquired state leases near Kenai on the Inlet's east side. Success at these projects could help bring the small nearby Sterling gas field back into production, the company has said.

Hilcorp also plans new gas exploration in the small North Fork field area east of Anchor Point. Hilcorp purchased assets in the area from two small companies, Vision Resources and Anchor Point Energy. The North Fork gas deposit has seen limited drilling and production and has produced gas through a pipeline built to connect with Enstar's pipeline near Anchor Point. Hilcorp believes North Fork has additional potential.

Hilcorp is also continuing to drill in its larger existing "legacy" gas fields in Cook Inlet to add incremental reserves. In a presentation to the state Legislature in January 2025, Hilcorp said it drilled 21 new wells in 2024 following 18 new wells in 2023.

The company plans a steady program of 15 to 20 wells per year going forward, Hilcorp told the legislators.

Overall, Hilcorp has invested approximately $1 billion in Cook Inlet after purchasing the Inlet's aging gas fields from Chevron Corp. and Marathon Oil Co. in 2012 and 2013. Since that time has drilled 174 wells and produced 700 billion cubic feet of gas.

Despite the new activity there are still concerns for an annual gas supply deficit beginning in 2027. Regional utilities are preparing to import liquefied natural gas, or LNG, to cover the deficit and meet consumers' needs for electricity and heating for buildings.

Hilcorp affiliate Harvest Alaska is involved in that, with a plan to purchase the mothballed former ConocoPhillips LNG export plant at Nikiski and convert it to an LNG import terminal.

Chugach Electric Association, the state's largest electric utility, is working with Harvest with a plan to purchase imported LNG to meet Chugach's gas supply needs for power generation.

The idea of having to import energy to an energy-rich state rankles most Alaskans but electric utilities like Chugach are required by government regulators to be able meet regional consumers' needs. Harvest would help do that along with plans by Hilcorp to make additional underground gas storage available for utilities and others. Having additional storage will be a key part of meeting regional energy needs.

The regional gas supply deficit is fairly modest in 2027 and 2028, according to studies by the Division of Oil and Gas, and new incremental drilling by Hilcorp and other companies could meet the short-term need. But by 2029 and 2030 the supply deficit will be much larger, according to the division's estimates.

Whether new drilling will be enough to substantially reduce imported LNG is unknown, however. New Cook Inlet gas wells tend to decline rapidly in production after first being drilled with decline rates of 30% per year not uncommon, Hilcorp told legislators in a briefing in January 2025.

SomeAlaskans hope that a North Slope natural gas pipeline project will move forward, bringing the large "stranded" gas reserves known on the North Slope. But the big project faces financing challenges and is another major unknown.

Editor's note: Tim Bradner is publisher of the Alaska Economic Report and Alaska Legislative Digest.