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

Vol. 25, No.31 Week of August 02, 2020

Hilcorp plans drilling at Beaver Creek

At Birch Hill plan is for a road to allow plugging and abandoning the field’s single gas well, which hasn’t produced since 1965

Kristen Nelson

Petroleum News

Hilcorp Alaska has current plans of development and operations submitted to the U.S. Bureau of Land Management for two small fields in the Kenai National Wildlife Refuge, one of which is in production, while the other hasn’t produced since 1965.

The producing field, Beaver Creek, averaged 108 barrels per day of oil in June, the most recent month for which Alaska Oil and Gas Conservation Commission data are available, and 9,851 thousand cubic feet per day of natural gas, accounting for less than 1% of Cook Inlet oil production and just over 5% of Cook Inlet natural gas production. Beaver Creek, discovered by Marathon Oil in 1972 and in production since 1973, is southwest of the Swanson River field on the Kenai Peninsula.

Birch Hill, discovered by ARCO Alaska in 1965, is north of Swanson River. It had its only production in June 1965, when over a period of 12 days it produced a total of 65,331 mcf of natural gas from the field’s single well, which AOGCC records show as suspended.

Beaver Creek

In Hilcorp Alaska’s POD submittal to BLM for Beaver Creek, reporting on work during the 2019 POD period, April 1, 2019, through March 31, 2020, the company listed necessary routine repairs and replacement of facilities as required to maintain and increase field production, “including converting a gas separator to an oil separator, piping modifications to accommodate oil well drilling,” installation of a new generator on Pad 4, completion of overhaul of a gas sales compressor, wastewater pump maintenance, fire and gas upgrades on Pad 3 and Pad 4, and installation of an oil LACT (lease automatic custody transfer) meter.

Cumulative production during the 2019 POD period was 2,741 million standard cubic feet of natural gas and 131,500 barrels of oil.

Hilcorp reported drilling a sidetrack to the BCU-04 well during the 2019 POD and perforating three wells.

AOGCC records for June 2020 show one active oil well at the field and seven active gas wells.

For the 2020 POD period, Hilcorp said necessary routine repairs and replacement of facilities would include work necessary to accommodate drilling of gas wells, which may include piping and/or electrical instrumentation.

The company said it anticipates drilling one new sidetrack project, BCU-19RD, during the 2020 POD period, and working over BCU-04RD. Hilcorp said that well failed mechanically in August 2019. AOGCC records for July 2019 show the BCU-04RD producing a total of 10,429 barrels, almost half of the 23,399 barrels the field produced in that month (755 barrels per day).

Birch Hill

At Birch Hill, the issue is work required to plug and abandon the field’s single well, although Hilcorp said it also continues to work with Cook Inlet Region Inc., which holds a 20% working interest in Birch Hill, to determine if there is interest from other parties in developing oil and gas resources in the Birch Hill area.

Hilcorp said it and CIRI have had two meetings “with an interested oil and gas company” on the possibility of Birch Hill development, and while the level of interest is unclear, “Hilcorp and CIRI plan to continue looking and evaluating potential partners.”

P&A at Birch Hill requires road access, although Hilcorp said it had evaluated using a helicopter.

During the 2019 POD period (April 1, 2019, through March 31, 2020), Hilcorp evaluated the option of constructing a gravel road to Birch Hill from the north, following an existing trail. The company said that route is entirely on Tyonek Native Corp. lands within the Kenai Wildlife Refuge.

The option the company previously proposed was a snow road and gravel road from the south, coming from a Swanson River pad. Hilcorp said it conducted environmental studies and economic analysis, as well as risk analysis, and determined the route from the south was no longer a preferred or viable option.

Hilcorp said it met with BLM and CIRI to discuss the northern road access to Birch Hill on TNC lands, and said that in addition to having less environmental and wetlands impact, that route is “significantly shorter, and involves less complicated land ownership and restrictions on said lands, compared to the currently approved road coming in from the south from Swanson River.”

The north road, however, is dependent on the Kenai Peninsula Borough’s Kenai Spur Highway extension project, and on coordination with TNC on road construction on their land and “transferring the constructed road to TNC after Hilcorp P&A’s the BHU 22-25 well and padsite.”

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