Providing coverage of Alaska and northern Canada's oil and gas industry
August 2022

Vol. 27, No.34 Week of August 21, 2022

State approves expansion of Paxton Pad

Pad currently accounts for 39% of Ninilchik unit natural gas production; expansion will provide space for rig to drill more wells

Kristen Nelson

Petroleum News

The Alaska Division of Oil and Gas has approved a request from Hilcorp Alaska to expand the existing Paxton Pad in the company’s Ninilchik unit on the Kenai Peninsula.

And the division and Hilcorp have responded to concerns from property owners in the vicinity of the pad.

In an Aug. 16 decision the division said the pad expansion will cover approximately 3.11 acres, providing space for a drilling rig to drill new wells. The new wells are not within the scope of the decision, the division said.

The pad is some 4 miles northeast of Ninilchik near milepost 131 of the Sterling Highway.

In its application Hilcorp said the expansion would allow for drilling of additional wells planned for 2022-23. The company said the pad expansion would be primarily in upland areas adjacent to the existing pad within already disturbed areas. There were nine gas wells in production on the pad in June, the latest month for which Alaska Oil and Gas Conservation Commission data is available, with production from the pad averaging 13.3 million cubic feet per day, 39% of Ninilchik’s average production of 33.8 million cubic feet per day. In June Ninilchik was the most productive Cook Inlet gas field, accounting for 15.7% of gas production from the Cook Inlet basin.

Public comments

The division received negative comments on the pad expansion from local property owners and said it appreciated the comments.

The division said it evaluated the plan of operations application under relevant regulations “and criteria within the 2018 Cook Inlet Areawide Final Finding and Mitigation Measures and said it “determined that Hilcorp has met all statutory and regulatory requirements to conduct the proposed activities.” The approval was limited to gravel placement and did not authorize any additional drilling. “Construction activities will be conducted during daytime hours and impacts associated with construction will be temporary,” the division said.

Both comments were lengthy, and are included with the decision, along with responses from Hilcorp.

Noise was a big issue and Hilcorp echoed the division’s statement that drilling was not part of this amendment to its plan of operations.

It said the pad expansion “does not include additional permanent infrastructure that would increase noise levels at the pad,” with construction impacts temporary, not expected to exceed 90 days and limited to a daytime 12-hour shift, generally 7 a.m. to 7 p.m.

“It is not practicable to operate the drilling rig on a schedule other than around the clock; however, steps will be taken to minimize visual and sound impacts during operation,” Hilcorp said. “Except where safety concerns dictate otherwise, lights on the drill rig and mobile light plants will be pointed down toward activities occurring on the pad. The typical use of loudspeakers to communicate during drilling will be replaced by the use of handheld radios. Additionally, drilling vehicles and heavy equipment will use broadband ‘white noise’ backup alarms, instead of the typical louder and more annoying single-tine backup alarms.”

There was objection to alarms coming from the pad.

“Audible alarms and natural gas venting during process upsets at the facility are required under state regulations,” the company said.

In response to concern about the impact on property values, Hilcorp said the proposed activity is “at an existing oil and gas facility and has been designed to minimize the footprint as much as practicable to maintain safe operation and production. Vegetative clearing around the perimeter will be minimized where possible to reduce visual impacts to neighboring properties.”

The company also addressed concerns about drinking water impacts, noting that AOGCC regulates drilling and water usage is regulation by the Alaska Department of Natural Resources’ Division of Mining Land and Water.

On the availability of natural gas to neighboring properties, Hilcorp said it supplies natural gas to utilities and does not interface directly with customers. “Natural gas service for local residents can be coordinated and managed by local utilities,” the company said.

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