Nikolaevsk unit remains a challenge

The Nikolaevsk unit continues to be a challenging field.

Even though operator Hilcorp Alaska LLC installed a compressor in the first quarter of 2014 to increase production from the Red No. 1 well, rates declined significantly over the course of the year - from 1.1 million cubic feet per day at the start of the year to 300,000 cubic feet per day at the end of the year. The company shut-in the field between November 2014 and February 2015 “due to the lack of a market for the gas,” according to a 2015 plan of development filed with the Alaska Department of Natural Resources.

After stop and start activity by a previous operator, Hilcorp brought the gas field in the southern Kenai Peninsula north of Homer into production in late 2012. The project was an early sign of Hilcorp’s willingness to invest in opportunities throughout Cook Inlet.

Hilcorp brought the field online from the Red No. 1 in December 2012 at 5 mmcf per day. Red No. 1 was producing 2.5 mmcf per day at the start of 2013. Hilcorp suspended production from April to October 2013 because of seasonal demand restrictions. By the end of the year, production had fallen to 796,000 cubic feet per day.

Hilcorp performed no drilling or major well work activity at the unit last year and has planned no drilling or major well work activity for this year, according to the company.

- Eric Lidji