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Explorers 2025: Hilcorp mixing areas of exploration
Looking for more gas on Kenai, with seismic planned; has plans to drill two Interior exploration wells in partnership with Doyon
Hilcorp's focus, nationally and in Alaska, is on maximizing production from mature fields.
In Cook Inlet, where the company began acquiring assets in 2011, this has meant expanding from existing production. The same is true on the North Slope, where the company began working in 2014 and became a major player in 2020.
But this year the company plans to drill in an undeveloped area where it has been doing preparatory work -- Yukon Flats in Interior Alaska.
History Hilcorp came to Alaska in 2011, focused on existing mature oil and gas fields in Cook Inlet which it purchased from Chevron/Union Oil Company of California. It later acquired Cook Inlet assets from Marathon Oil and ConocoPhillips Alaska. In 2014 the company expanded to the North Slope, acquiring BP Exploration (Alaska)'s interests in Endicott and Northstar, and half of BP's working interest in Milne Point. In 2020, Hilcorp acquired BP's remaining interests in Alaska, including BP's share of Prudhoe Bay, and became operator of the Prudhoe Bay field, and in the process the state's largest oil and gas producer.
Founded in 1989, Houston-based Hilcorp is currently "the largest privately owned oil and natural gas producer in the country," the company says on its website, employing almost 3,000 people in the nine states where it operates.
Exploration is not Hilcorp's focus. Describing itself the company says it "acquires conventional oil and gas assets and optimizes them by leveraging our teams' operational expertise, modern technology, and innovation, along with an equal commitment to safety and environmental responsibility."
Hilcorp and Doyon The Yukon Flats exploration wells Hilcorp plans to drill this summer are on subsurface owned by Doyon Ltd. from surface land owned by Tihteet'Aii, the Native corporation for the village of Birch Creek. Hilcorp has had an oil and gas exploration agreement with Doyon, the Native regional corporation in the area, since 2019, and conducted an aerial gravity survey of the entire Yukon Flats basin in 2019, identifying an area of interest in the Birch Creek area and drilling 13 shallow stratigraphic test wells in 2021, a number of those near the company's proposed exploration drilling area.
On its website Doyon notes that the corporation's "early leaders, in partnership with Beaver, Birch Creek, Chalkyitsik, Circle and Fort Yukon leaders, focused on allocating 400,000 acres of Doyon's land entitlement within the Yukon Flats region for oil and gas potential that had been identified in the 1970s."
The 2019 agreement with Hilcorp, Doyon said, was for exploration on 1.6 million acres with roughly 3%, less than 60,000 acres, selected by Hilcorp for continued exploration in 2024.
The corporation said Hilcorp plans to confine future activity to an area focused on Birch Creek, currently less than 5 acres across two project sites and a staging area. Doyon said any further work by Hilcorp would require re-engagement between Doyon and Hilcorp.
The corporation said it "has worked with Hilcorp to ensure no limitations on subsistence activities near the project sites."
Yukon Flats is some 11.1 million acres of lowland around the Yukon River between the trans-Alaska oil pipeline and the Canadian border, much of it in the Yukon Flats National Wildlife Refuge, although Doyon owns some subsurface blocks and village Native corporations such as Tihteet'Aii own some surface land.
There are several fairly deep sub-basins with relatively high temperatures which could be conducive to oil and gas formation. A U.S. Geological Survey assessment done in 2004 suggested a range of zero to almost 600 million barrels of technically recoverable oil in the basin, with a mean of some 173 million barrels. The zero at the bottom of the range reflects that to date there has been no demonstration of recoverable oil in the basin. Natural gas resources could range from zero to almost 15 trillion cubic feet.
Petrotechnical Resources of Alaska did an assessment and said there could be an oil field on the scale of Alpine somewhere in the basin.
Doyon said in 2011 that seismic surveying indicated a sub-basin at Birch Creek with structures that could have trapped oil and gas.
Hilcorp did an aerial survey of the entire basin in 2020 and expressed an interest in the Birch Hill area, moving forward initially with stratigraphic test wells and now with planned exploration wells.
2025 plans In its application to the Alaska Department of Environmental Conservation for an Oil Discharge Prevention and Contingency Plan for Yukon Flats Exploration, dated Sept. 20, 2024, Hilcorp said drilling operations were planned for sites 4A and 6A, both on private land owned by Doyon Ltd. and Tihteet'Aii some 30 miles southwest of Fort Yukon.
Access to sites will be by helicopter from the Birch Creek base camp or by barge or skiff, depending on conditions, with a smaller river barge from Birch Creek Village used if necessary to access the sites.
Birch Creek is some 10 miles from site 4A and some 15 miles from site 6A.
The company said sites 4A and 6A are cleared and leveled with helicopter landing zones in clearings near the sites. Rig mats will be used for stable working and transport surfaces, with spill conexes on-site and at staging areas during drilling operations.
Doyon said March 20 that a five-person crew was scheduled to depart from Circle via snow machines to Birch Creek before the end of the month to remove strainers and sweepers -- fallen trees and debris obstructing the waterway -- accessible from ice, to facilitate a smoother river breakup and improve waterway conditions.
The corporation said Hilcorp had overwintered a barge in Birch Creek in close proximity to the project sites, enabling operational efficiency in the spring and beyond when planned development of the two drill sites begins.
Cook Inlet While the majority of Hilcorp's Alaska production is now from the North Slope, it is still the largest producer in Cook Inlet -- of both oil and gas -- with Cook Inlet oil sold to the Marathon Petroleum Kenai refinery and natural gas sold to utilities for both power production and heating in Southcentral Alaska.
Hilcorp has worked steadily to expand production from its Milne Point field on the North Slope, but its work in that field has been in line with the company's traditional focus on applying its expertise to existing fields.
In Cook Inlet, however, Hilcorp has worked to find new gas accumulations in the basin, shooting seismic and drilling stratigraphic test wells south along the coast from its existing Ninilchik unit to the Anchor Point area.
Seismic shot in 2024 included some 46 miles of 2D between Clam Gulch and Anchor Point and some 60.2 miles of 2D in what Hilcorp called the Southern Kenai transition zone seismic -- offshore, onshore and tidal zones -- from Ninilchik to Anchor Point.
Beginning in 2017, Hilcorp drilled stratigraphic test wells on the southern portion of the peninsula, five in that year, followed by four in 2019, eight in 2020, 16 in 2022 and 17 in 2024. None are so far scheduled for 2025.
An exploration well, Cottonfield 6, was drilled in early 2024 onshore west of the Cosmopolitan unit north of Anchor Point.
North Fork The company applied to the Alaska Department of Natural Resources' Division of Oil and Gas in March to shoot 3D seismic on the Kenai Peninsula, described as the White 3D, covering some 69 square miles from the northeastern border of the North Fork unit, which Hilcorp is in the process of acquiring from Vision Resources, to east of Hilcorp's Deep Creek unit. A lease ownership map posted by the division in February shows a handful of leases in the survey area held by Hilcorp with a considerable portion of the area unleased.
The Hilcorp North Fork purchase includes the North Fork Pipeline which carries the unit's gas with purchase conditional on conversion of how the pipeline is authorized. An application to the Regulatory Commission of Alaska for that conversion requests an expedited decision. The sale is anticipated to close by May 1 and a commission decision is requested by April 15, the application says, allowing Hilcorp to explore at North Fork by year end.
West side of Cook Inlet Hilcorp plans two wells on the west side of Cook Inlet described as exploration/delineation wells at an existing unit, Pretty Creek, north of the Beluga River unit in the vicinity of the Ivan River and Lewis River units. The company said the Sterling and Beluga formations are the main objectives with Tyonek a possible secondary objective and bottomhole locations potentially "outside of the existing unit boundary."
The wells require a new pad, the company said in its most recent plan of development for Pretty Creek, a small gas field which has produced intermittently from a single well in recent years.
The Diamond Pad will be in the northern part of the unit, northeast of the existing Pretty Creek Pad. Work on the new pad was scheduled to begin in April, with pipeline and operational facilities installation June through August, followed by mobilization of the drilling rig and drilling to begin in September.
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