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State OKs Hilcorp’s Blossom pad, wells
Kristen Nelson Petroleum News
The Alaska Department of Natural Resources, Division of Oil and Gas, has approved a request by Hilcorp Alaska to construct a new gravel pad and drill up to two exploration wells in the Ninilchik unit.
If results of the exploration wells are successful, Hilcorp would pursue natural gas production from the new pad, Blossom.
“Any further development, including commercial production from the Blossom Pad is subject to further review and approval” by DNR, the division said.
Hilcorp requested approval of a unit plan of operation for the work in October (see story in Nov. 16 issue of Petroleum News).
The division said the Ninilchik unit has been in development since the mid-2000s. It is part of the oil and gas interests acquired by Hilcorp in 2011 and 2012, when it acquired the Cook Inlet assets of Union Oil Company of California and Marathon Oil.
Onshore pad The division said Hilcorp is proposing to drill and test two exploration gas wells from the Blossom pad which will be built between Clam Gulch and Ninilchik. Hilcorp must secure an access and use agreement with the private landowners of the surface and subsurface under the proposed pad site.
The Ninilchik unit is primarily offshore, with pads onshore - from north to south, Abalone, Falls Creek, Bartolowits, the proposed Blossom pad, Grassim Oskolkoff, Ninilchik State, Susan Dionne and Paxton.
Hilcorp would drill directionally from the onshore Blossom pad targeting shallow offshore gas reserves within the unit.
Alaska Oil and Gas Conservation Commission data for October, the most recent month available, shows that the Ninilchik unit has cumulatively produced some 161 million cubic feet of natural gas, and produced 1.3 million cubic feet in October.
Construction In addition to the pad, Hilcorp would build a short new access road from the Sterling Highway to the existing access road to avoid private residences. Road construction was scheduled to begin in December and drilling in January with the Blossom Exploratory Well No. 1, and a second exploration well to be drilled in the first quarter of 2015 or later depending on results from the first well.
Hilcorp said in its plan that it would rehabilitate and reclaim the land to the satisfaction of the surface landowners.
The division said that is inconsistent with the Ninilchik unit agreement, under which the unit operator agreed to rehabilitate the site of all improvements at the option of the state and to the state’s satisfaction.
The division said it had determined that to protect the state’s interest Hilcorp’s rehabilitation plan needed to be amended to specify that Hilcorp would rehabilitate the surface to the satisfaction of the state.
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