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Producers 2025: Hilcorp doing what it does best Plans major west-end development at Prudhoe Bay and new producing well at Point Thomson
Tim Bradner for Petroleum News
Hilcorp Alaska is doing what it does best on the North Slope, investing aggressively and applying new technologies in mature oil and gas fields to boost production.
So far Milne Point is Hilcorp's greatest success on the North Slope, but more is coming.
Production at Milne Point has tripled since Hilcorp bought into and became operator of the field from BP in 2014. It was then producing about 17,000 barrels of oil per day. But production has steadily increased after taking full control of the field in 2020, a $2.5 billion investment in drilling, construction of new facilities -- including both the Moose and Raven Pads -- and application of a polymer flood, the first on the North Slope.
Earlier this year, Milne reached more than 50,000 bpd and Hilcorp says it's optimistic it can reach 60,000 bpd in the next few years. That's according to Daniel Donovan, Hilcorp's Western North Slope Asset Team Leader, who spoke at the Alaska Oil and Gas Association's annual conference in Anchorage Sept. 27.
At the large Prudhoe Bay field, Hilcorp stabilized production after taking over as co-owner and operator from BP in 2020.
Under BP's operatorship, production at Prudhoe had been declining gradually, as aging oil fields do, but through major investments into the field Hilcorp has mostly stopped the decline.
Taiga project Now Hilcorp is planning a major new project in the underdeveloped west end of Prudhoe that could actually boost field or at least continue to minimize production decline. This project, being called "Taiga" by Hilcorp. includes the development of two new pads on the west of Prudhoe Bay to develop the Schrader Bluff oil.
Hilcorp is proceeding with what Donovan describes as "greenfield development" on previously untapped tracts of Prudhoe subsurface. Phase one -- projected to deliver peak production of 25,000 bpd -- centers on the construction of a new drill site called "Omega Pad"and 51 development wells, with first oil expected in 2028.
A second phase would add another site "I-Pad," potentially bring on an additional 15,000 bpd as early as the 2030s.
A substantial part of the reservoir to be tapped in the Prudhoe west end project, is viscous oil similar to that in the Schrader Bluff viscous oil at Milne Point.
Viscous oil is cooler than conventional crude oil mainly because it is typically found at shallower depths than the large conventional oil reservoirs on the North Slope, which are deeper and at warmer temperatures so that the oil flows more easily.
Hilcorp now has substantial experience with viscous oil because of its work in developing Milne Point. The Schrader Bluff oil at the field is also found at Prudhoe Bay's west end and it similar to the West Sak viscous oil found in the Kuparuk River field, except that West Sak is even shallower and cooler and has presented its own technology challenges for ConocoPhillips and, earlier, ARCO Alaska.
The polymer injection at Milne Point was developed in cooperation with the University of Alaska Fairbanks' Institute of Northern Engineering. The project now involves injection of 58,000 bpd of the polymer, which is done in a pattern alternating with water.
Hope for Ugna Hilcorp is also now producing a limited amount of oil from the Ugnu formation that underlines large parts of Milne Point. Ugnu is true heavy oil that is denser and colder, because it is even shallower than the viscous oil in the Shrader Bluff deposit.
The deposit is a very large oil resource with some estimates exceeding 20 billion barrels of oil in-place or locked in the reservoir rock. Producing it, and getting the oil to flow, is the main challenge. Where producing companies typically see 40 percent or more recovery of oil from conventional North Slope fields the estimates for heavy oil accumulations like Ugnu are much lower, at 10 percent or even less.
Polymer at Nikaitchuq UAF's Institute of Northern Engineering has also been working with new processes to produce the heavy oil and have found that a technique of injecting a solvent alternating with water and polymer has promising results, at least as shown in laboratory studies.
Hilcorp is also actively working to boost its to-do list, and may be boosting two smaller North Slope fields the company acquired from the Italian state-owned company Eni S.p.A last year, Nikaitchuq and Oooguruk.
These are offshore fields in shallow Beaufort Sea waters just north of the Alaska coast. Nikaitchuq produces viscous as well as conventional oil and Hilcorp hopes its polymer production technology successfully used at Milne Point may be equally successful there.
"We have hopes that this can produce Milne Point typo results," Donovan said.
New well at Point Thomson Hilcorp also has plans for Point Thomson, the large gas and condensate field east on the eastern North Slope, about 60 miles east of Prudhoe Bay. A new gas and condensate production well at a new drill-site is planned for 2026 that is expected to add production and bring Point Thomson production to near 10,000 bpd.
It is the first new well drilled at Point Thomson since 2016-2017 and it's an expensive project budgeted at $180 million. Logistics are a major part of what makes it expensive, Donovan said. Doyon Drilling's Rig 15, previously now on Spy Island in the Nikaitchuq field was recently moved by barge in a major sealift earlier this month to Point Thomson. Preparations are underway for drilling to commence this winter and will require an approximately $40 million ice road to be built to the location.
The field is now producing about 4,000 b/d and has been short of its production goal because of technical challenges in producing and injecting produced gas back into a high-pressure reservoir. The new well will bring liquid condensate production to 10,000 bpd, the target for Point Thomson. First oil from this new well is anticipated for the second half of 2026.
Hilcorp's acquisition of BP's Alaska assets included its share of Point Thomson, which is 32.6%. ExxonMobil, which also owns a significant part of Point Thomson, about 62.5% and there are also some small owners. ExxonMobil was previously the Point Thomson field operator but has passed that responsibility to Hilcorp, who is known for its ability to bring aging assets back to life through efficiency and investment.
The Point Thomson assets also include a 22-mile pipeline that connects the field with the 25-mile Badami pipeline at that small oil field essentially half-way between Point Thompson and Pump Station One of the Trans Alaska Pipeline System at Prudhoe Bay.
Meanwhile, major maintenance is at the top of the list for any field operator, and this summer Hilcorp did a major "turnaround" project at Prudhoe Bay. The project involved taking Gathering Center-2, or GC-2, on Prudhoe Bay's west end, off-line for period for about a month, which temporarily reduced Prudhoe Bay production by 60,000 b/d. It has since been restored.
The Prudhoe turnaround was a major project, that involved about 125,000 man-hours or labor and 500 people who performed 385 "work items," Donovan told the AOGA conference.
The resulting work will improve gas quality going to the gas plants, upgrade gas dehydration systems will allow more oil to be produced from production pads on Prudhoe's west side.
Hilcorp Corporate Manager of Government and Public Affairs Matt Shuckerow said, "Hilcorp is proud to reach completion of its largest ever turnaround at Prudhoe Bay, which was supported by our team of employees and hundreds of contractors and operators working around the clock this summer. This 5-week planned turnaround was completed safely and ahead of schedule, and underscores Hilcorp's deep commitment to the field."
Hilcorp owns 27.1% of Prudhoe Bay, the portion previously held by BP. ConocoPhillips and ExxonMobil are working interest owners in the field, with 36.5% owned by ConocoPhillips Alaska, 36.4% held by ExxonMobil Alaska.
Editor's note: Tim Bradner is publisher of the Alaska Economic Report and Alaska Legislative Digest.
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