AOGCC approves Hilcorp’s Seaview No. 9

Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission has approved an application from Hilcorp Alaska for the Seaview No. 9 delineation well.

This will be the second well at the company’s southern Kenai Peninsula Seaview gas field. Hilcorp is in the process of completing a gas line which will enable it to begin production from Seaview 8, the discovery well at the field.

The Seaview 9 well will be in an undefined gas pool within 1,500 feet of a property line where owners and landowners are not the same on both sides of the line, the commission said, and where more than one well will be drilled to and completed in the same pool in the same governmental section and completed closer than 3,000 feet to any well drilling to or capable of producing from the same pool.

The commission said the well is classified as an exploratory well because it is drilled to delineate a pool.

Hilcorp provided a list of tract ownership listing mineral owners, gross acreage and mineral interest percentage for each tract, and proposes an escrow account for 100% of production royalties allocated to non-participating owners/landowners and uncommitted tracts.

The Seaview 9 “targets unproven discontinuous and lenticular reservoirs” which cannot be reached by a well conforming to spacing requirements, the commission said.

As part of its order the commission addressed requirements for the escrow account, including a requirement that Hilcorp deposit, no later than the 30th day of each month, “an amount equal to the total of that non-participating owner’s/landowner’s interest percentage for those parcels multiplied by the production attributed to those parcels for the previous month multiplied by 0.125 (the royalty rate) multiplied by the prevailing value for Cook Inlet gas published for that quarter by the Alaska Department of Revenue.”

Hilcorp is required to provide the commission a tract ownership schedule within 60 days listing all tracts within 1,500 feet of the Seaview 9 wellbore, and on or before Feb. 1 of each year, the company is required to provide the commission an updated tract ownership schedule and detailed accounting of the escrow account.

- KRISTEN NELSON