Moose Pad startup in January

Hilcorp Alaska said it will start production at its new Moose Pad project in the Milne Point field in January, on schedule, and that an oil process plant at the site is now 85 percent complete. Moose Pad will eventually produce 85,000 barrels per day. In the short term the company said Milne Point output, which has required a $400 million investment, will increase from 23,000 barrels per day now to 24,000 to 26,000 by the end of January and 35,000 barrels per day by the end of 2019. Development costs are estimated at $6 to $7 a barrel.

Hilcorp said it it also now using a polymer reservoir “flood,” (or injection), the first in Alaska, to boost viscous oil output at the Schrader Bluff project in the Milne field. An oil resource of 1.3 billion barrels is in the rocks at Milne Point but only 10 percent to 15 percent can be recovered. The polymer helps loosen the thick oil, helping it flow and improving the recovery. If the technique works it could be used at other North Slope viscous oil deposits, which contain substantial in-place resources.

Oil Search: Pikka decision in 2020

The U.S. Army Corps of Engineers published the long-awaited Final Environmental Impact Statement for the Pikka oil project near the Colville River, which the corps is calling the Nanushuk development. Austrialia-based Oil Search is operator with Repsol as minority partner. Oil resources are estimated at 500 million barrels and projected production is 100,000 barrels per day. The final EIS is out for a 30-day public review after which the corps will issue a Record of Decision. Following that, Oil Search and Repsol will have to make the decision to develop the project. The two companies plan two more evaluation wells this winter to better define the reservoir and preparation for drilling, including ice road construction, has started.

Oil Search is also beefing up its Alaska staffing. About 80 are employed now and this will reach 100 by mid-January and 200 in 2019. A decision to proceed into final engineering will be made in mid-2019 with a Final Investment Decision in 2020. First production is expected in 2023. The company also said it is planning for 120,000 barrel per day at Pikka, and reserves are now estimated at 720 million barrels. It is hoped that reserves will grow with more drilling.

Eni to do Nikaitchuq tests next year

Eni suspended operations on its closely-watched Nikaitchuq North No. 1 exploration well with plans to resume operations and any flow-test next spring. Drilling ceased in late August in compliance with seasonal drilling restrictions. Eni began the well last December with plans to complete it by February, and also to drill a “sidetrack,” (essentially a second well). The schedule was delayed by “unforeseen” drilling problems, the company said. It did not identify the problems. However, the well would be one of the longest extended-reach wells drilled in Alaska and these long, essentially horizontal wells can encounter technical problems.

Lower Inlet seismic survey: Hilcorp

Hilcorp Energy plans a 3-D seismic survey on lower Cook Inlet federal leases next spring followed by a geohazard survey later in the year or in spring, 2020. The company hopes to drill Outer Continental Shelf exploration wells in the area between 2020 and 2022.  

State nets $29.9 million in leasing

Alaska netted $29.94 million in bids from a North Slope and Beaufort Sea lease sale held Nov. 15, with Repsol, a major company, submitting the highest bid at $586 per acre. Independent Lagniappe Alaska LLC, a Louisiana group, acquired the most acreage, acquiring 120 of 133 leases auctioned

Slope oil production running below 2017

North Slope production Alaska North Slope production is running 17,402 b/d below 2017 for the first 10 months of the year, compared with the same 10-month period of January through October, 2017, according to data provided by the state Department of Revenue. The annual average for the year to date totals 505,184 b/d for the 10-month period compared with 522,586 barrels per day for the same period of 2018, the data shows. The figures are taken from production tax reports filed by producer companies, according to Dan Stickel, the state’s chief petroleum economist. New production from ConocoPhillips’ GMT-1, now in opperation, and Hilcorp’s Moose Pad, to begin in January, will increase the fiscal year average by June 30, however.

The revenue department is meanwhile preparing its 2018 long-term production and state revenue forecast. The report is usually issued in late November or early December.