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The Explorers 2018: Hilcorp drills stratigraphic wells at three prospects
Drilling program in the southern Kenai Peninsula in late 2017 mostly supports existing Hilcorp developments in the region
Eric Lidji for Petroleum News
Hilcorp Alaska LLC came to Alaska with a clear focus on development.
The local subsidiary of the Texas-based independent accumulated a large portfolio of legacy assets in the Cook Inlet region and on the North Slope through separate deals with Marathon Oil Corp., Union Oil Company of California and BP Exploration (Alaska) Inc.
Those fields provided more than enough work for Hilcorp, which has long focused on improving production from existing fields through investment and maintenance.
In its first five years in Alaska, Hilcorp only used exploration to expand operations within existing units, particularly at the Ninilchik and Deep Creek units on the Kenai Peninsula.
Even a foray beyond unit boundaries was closely tied to work at nearby units.
Hilcorp shows no sign of drilling wildcats in Alaska anytime soon. But the company took a somewhat more expansive approach to its exploration activities in the Cook Inlet region in 2017 by drilling 16 stratigraphic test wells at three prospects in the southern Kenai Peninsula - Pearl, Seaview and Deep Creek SW - during the latter half of the year.
Pearl The Pearl program supports development activities at the Ninilchik unit.
In June 2017, Hilcorp announced plans to build the 3.77-acre Pearl pad to support a one-well delineation program on private lands just beyond the southern boundary of the unit.
By the time the state Division of Oil and Gas approved the pad project in late August 2017, Hilcorp had already received permits from the Alaska Oil and Gas Conservation Commission to drill seven stratigraphic test wells near the proposed pad site: Pearl No. 1A, Pearl No. 2, Pearl No. 3, Pearl No. 4, Pearl No. 5, Pearl No. 6 and Pearl No. 7.
Hilcorp completed the seven stratigraphic tests wells between July 11 and Aug. 8, according to AOGCC records. The company drilled all seven wells either on private leases or on state of Alaska or Kenai Peninsula Borough rights of way. All the wells were 600-foot vertical wells except for Pearl No. 3, which was a 540-foot vertical well.
Planning documents from the state suggest that the seven stratigraphic test wells were preparation for the Pearl 2A delineation well from the Pearl pad, scheduled for late 2017.
By the end of March, Hilcorp had yet to receive a drilling permit for Pearl No. 2A.
One objective of the Pearl program, according to the decision from the state, was to determine whether the commercial viability of the Ninilchik unit “extends south of the Paxton Pad and potentially beyond the Susan Dionne-Paxton participating area.”
Union Oil Company of California drilled the 8,000-foot vertical Pearl No. 1 gas well in February and March 2002. The company plugged and abandoned the well in April 2003.
Pearl No. 1 was part of a three-well exploration program associated with Enstar Natural Gas Co. construction plans in the region. The well failed to find commercial quantities of natural gas, leading Enstar to terminate its proposed Kenai-Kachemak Pipeline in Ninilchik, rather than extend it all the way to Anchor Point. It would take another decade before developments in the region finally connected nearby Homer to the regional grid.
In planning Pearl No. 1, Union Oil Company of California described the well as a deviation of an even earlier well, most likely Mobil Oil’s Ninilchik Unit No.1 from 1964.
Seaview Soon after completing the stratigraphic test well program at Pearl, Hilcorp received permits from the AOGCC to drill seven stratigraphic test wells at the Seaview prospect.
Hilcorp drilled the Seaview No. 1, Seaview No. 2, Seaview No. 3, Seaview No. 4, Seaview No. 5, Seaview No. 6 and Seaview No. 7 wells between Sept. 11 and Sept. 17 in a coastal region south of Anchor Point. The company drilled the wells on private lands, on Kenai Peninsula Borough rights of way and on ADL 392667.
Seaview No. 1, No. 2, No. 4 and No. 5 were 600-foot wells. Seaview No. 3 was a 540-foot well. Seaview No. 6 was a 480-foot well. Seaview No. 7 was a 322-foot well.
Hilcorp owns five leases in the Seaview region with expiration dates between Nov. 30, 2023, and Feb. 28, 2025. The acreage is just onshore from the Cosmopolitan unit.
In early 2018, Hilcorp asked the Alaska Department of Environmental Conservation for permission to amend its Cook Inlet oil discharge, prevention and contingency plan to include a new Seaview pad some 1.2 miles south of Anchor Point in mid-2018.
Deep Creek SW Following the Seaview program, Hilcorp received permits from the AOGCC to drill two stratigraphic test wells in the vicinity of the Deep Creek unit, between Pearl and Seaview.
The company drilled the 453-foot Deep Creek SW4 test well on Cook Inlet Region Inc. land Oct. 16 and the 401-foot Deep Creek SW3 test well on ADL 389226 on Oct. 17.
According to the state, the company drilled the test wells “to assist in exploring Sterling and Beluga formations.” The program followed the 13,500-foot deviated Greystone No. 1 exploration well that Hilcorp drilled just south of the Deep Creek unit on July 2016.
Going back to the days when Marathon operated the Deep Creek unit, the state has been lobbying for exploration activity in the southern half of the unit. The state has repeatedly threatened to contract those leases out of the unit without signs of forward momentum.
The Greystone program convinced state officials to delay a planned contraction of the Deep Creek unit for the third time, first until May 31, 2016, and then until Nov. 30, 2016.
“Based on the Greystone well results, Hilcorp is narrowing its focus in the Middle Happy Valley area to target Undefined Sterling and Beluga formations,” Division of Oil and Gas Director Chantal Walsh wrote in December 2016, in a decision to defer contraction until June 2017. “Hilcorp now plans to drill six to eight stratigraphic wells to shallow depths in the winter of 2017 in an attempt to better understand the formations’ structure. All the stratigraphic wells will be drilled to the south of the Happy Valley Participating Area.”
In its next plan of development, submitted in March 2017, Hilcorp announced plans to drill six stratigraphic test wells in the vicinity of the Deep Creek unit. The company said it would complete the first four wells before June 2017. The remaining two, which required the public winter trail system, were scheduled for the late third quarter of 2018.
The results of the program, according to Hilcorp, would help guide exploration drilling plans targeting the Sterling and Beluga formations at Deep Creek in 2018 and 2019.
The state approved the plan, which also included a new request for delayed contraction.
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