Providing coverage of Alaska and northern Canada's oil and gas industry
May 2020

Vol. 25, No.19 Week of May 17, 2020

Milne hits high

Hilcorp sets new production record, bodes well for Prudhoe Bay future

Kay Cashman

Petroleum News

On May 8, David Wilkins, senior vice president of Hilcorp Alaska, told the House Resources Committee that the company recently set a new production milestone of 36,000 barrels per day at its North Slope Milne Point field, up from 18,400 bpd in November 2014 when Hilcorp acquired a 50% interest in the field and took over operatorship from BP Exploration (Alaska).

“We have also expanded our polymer operations at Milne Point and started a third polymer pilot project at F pad … in the last two weeks,” Wilkins testified.

Among other things, Hilcorp’s tool chest to increase output from mature fields includes injecting polymer and water into reservoirs.

The company also continues to perform “routine well work activity and maintenance activity,” he said.

In February, Hilcorp said it expected to reach 40,000 bpd at Milne Point by the end of this year - performance that BP Vice President Darian Bilbao recently said bodes well for future exploitation of Prudhoe Bay’s remaining resources when Hilcorp’s acquisition of the giant oil field from BP closes (see related story in this issue of Petroleum News.).

Double gut punch

While taking safety precautions to guard its workers against the coronavirus, Hilcorp has largely continued its operations in Alaska’s oil and gas fields, only deferring minor work that can be done later.

“We’re facing a double gut punch - a global pandemic coupled with a drop in demand, a global oversupply,” Wilkins told the committee. “I am proud to say Hilcorp’s drilling and production operations have continued. The credit for that goes largely to our field employees and our contractors and vendors.”

“Of course, nobody knows what the future holds, and those things may change,” Wilkins said.

“We still have three drilling rigs operating in Alaska - two on the North Slope and one in Cook Inlet. On the North Slope we expect most drilling operations to continue as planned - the Innovation rig, which is operated by Parker Drilling, and the Doyon 14 rig,” he said.

In the Cook Inlet basin Hilcorp is “focused on meeting its natural gas commitments to local utilities. Cook Inlet gas production is building storage during the spring and summer and we continue to drill there so we can store gas for the winter,” Wilkins said. On the Kenai Peninsula the company is using Hilcorp’s 169 drill rig, which is operated by Parker.

On the North Slope “shifts for the drilling crew have been extended to reduce travel frequency,” he said.

“Workover operations are critical to maintaining and increasing production and remain a key component of our work plan in 2020 and beyond. On the North Slope the Hilcorp ASR workover rig has been laid down for maintenance but we anticipate we will reactivate it when the maintenance is complete later this summer,” Wilkins told the committee.

Workovers in the Cook Inlet basin are being done by Hilcorp rigs 404 and 401, operated by All American Oilfield, a subsidiary of Chugach Native Corp. Their crews are 100% Alaska-based and are therefore still working on 14 day shifts, he said.

96% live in Alaska

Hilcorp Alaska employs 580 people - 96% of whom live in Alaska. Only seven employees are currently working in the company’s mid-town Anchorage headquarters due to COVID-19 protocols.

“We’re encouraging employees, including those supporting regular production operations, to work from home,” Wilkins said.

Hilcorp took “early and decisive action to respond to COVID-19,” he said, noting the company’s workforce continues to be COVID-free.

“We’ve removed all non-essential field personal from Hilcorp locations so if it doesn’t need to happen today, we have basically said ‘let’s just wait and not do it.’”

“We’ve arranged private charter flights from Anchorage to Deadhorse through Alaska Airlines to further eliminate any outside exposure,” Wilkins said.

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