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Hilcorp applies to expand Milne Point
KRISTEN NELSON Petroleum News
Hilcorp Alaska LLC has applied to the Alaska Division of Oil and Gas to expand the Milne Point unit by adding some 1,268 acres in two state oil and gas leases.
Hilcorp is a 50 percent working interest owner in Milne Point, and the unit operator; BP Exploration (Alaska), the former operator, holds the other 50 percent.
In its application Hilcorp told the division it acquired oil and gas lease ADL 392703 in May and effective Oct. 1, 50 percent of the working interest was assigned to BP.
The lease is adjacent to the Milne Point unit and at one time was incorporated into the unit, but was contracted out of the unit in 2005 by administrative action.
Hilcorp said that during the contraction process all the parties “failed to recognize the critical operational importance of this lease to the MPU.”
Bottomhole for disposal well MP B-50, “the only operational waste water disposal well” in the unit, and one that Milne Point depends on “for all its waste water disposal needs,” has its bottomhole in the acreage contracted out of the unit.
There is another well, MP B-24, on the same drill site, “permitted to handle muds and cuttings.” That well also has a bottomhole outside the existing unit boundary “and is a likely candidate for additional waste generation disposal.”
Hilcorp told the division the B-24 well “will provide redundancy and back up waste water disposal capacity to B-50.”
The company said that as well work and future exploration and development work increases, “additional waste water disposal wells and facilities may be required.”
Following the contraction of the lease, the land was leased by parties not affiliated with the MPU, “and for an extended period of time, the MPU working interest owners and DOG sought resolution of this unintended consequence and conflict created by the contraction.”
Following the Oct. 1, 2015, assignment, the MPU working interest owners have reconsolidated the leasehold and want it reincorporated into the unit.
Hilcorp said the 1,268 acres “represents the expansion area outside of the existing MPU necessary to incorporate well paths, arcal injection, and bottom hole locations of B-50, B-24, and acreage to accommodate a possible future third waste water disposal well,” with 948 acres being added from ADL 392703 and 320 acres from ADL 47438.
Hilcorp said the approval will provide for waste disposal facilities and told the division that over the last year B-50 has averaged an injection rate of 30,000-35,000 barrels of water per day, and said a shut-in of that water disposal well would affect a crude oil volume of 5,000-8,000 barrels per day, between 25 and 40 percent of the field’s overall production.
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