Hilcorp applies to drill two exploration wells

Hilcorp Alaska’s plans to drill two additional oil and natural gas exploration wells southeast of Ninilchik are moving forward into the permitting phase.

If approved, the company plans to begin clearing vegetation in late September, construct a gravel pad and begin drilling two wells to be completed by May 2016.

Hilcorp has been exploring in the Deep Creek unit, near Happy Valley, since 2013. The plans for the Happy Valley Middle Pad have been in the works since March 2004 under then-operator Unocal. The company is currently working in four other pads in the Deep Creek Unit and has proposed another pad to the northwest of the Happy Valley Middle Pad.

The company says it presented the initial idea to the public in Ninilchik in October 2014.

“Hilcorp employees are actively engaged with regulators and stakeholders on all activities within the state,” the company said in the application. “Hilcorp community outreach to date has included presentations to the Kenai Chamber of Commerce, the Alaska Support Industry Alliance, the Anchorage Chamber of Commerce, and the Cook Inlet Regional Citizens Advisory Council. Hilcorp has also participated in Ninilchik Natives Association, Inc. board meetings to present project updates.”

The proposed gravel pad will be approximately 300 feet by 400 feet and will include an approximately 2 mile access road. Because the proposed road will cross the Happy Creek, the company will construct a bridge and install a 12-foot culvert, according to the application. The road will connect to an existing logging road, an extension of Tim Avenue, which branches off the Sterling Highway at milepost 142.8.

To support the culvert and additional access, approximately 175 feet of Tim Avenue will be widened.

The contractors will attempt to use existing road material to widen the road and propose to fill in approximately 0.02 acres of wetland to prevent future erosion of the road, according to the application.

If granted, the permit does not allow the company to set up a permanent operation — if the exploration is successful, the company will have to file another application for permission to continue.

A Hilcorp spokesperson did not return a request for comment regarding a construction start date or potential hires within the area. The company said in its application that 88 percent of its workforce is made up of Alaska residents.

If the project is successful, the company will establish permanent drilling facilities and build a buried pipeline that would stretch 5.6 miles to reach an existing ENSTAR pipeline, according to the application.

Hilcorp, a privately held company based in Houston, Texas, has rapidly expanded its holdings in Alaska in the last decade.

After it won a regulatory approval for its purchase of Marathon Oil’s Alaska assets in 2012, Hilcorp took control of approximately 70 percent of the natural gas production in the Cook Inlet.

In July, the company cut a deal with Exxon Mobil subsidiary XTO Energy to purchase its Cook Inlet holdings for approximately $550 million.

The Alaska Department of Natural Resources will accept comments on the proposed projects until 4:30 p.m. Alaska Standard Time on Oct. 10. Comments can be emailed to the Division of Oil and Gas at dog.permitting@alaska.gov, or mailed to 550 West 7th Ave., Suite 1100, Anchorage, Alaska, 99501.

A copy of the DOG’s decision will be mailed to anyone who submits a comment.

 

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com

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