State probes Hilcorp financial capabilities to handle emergencies
Department of Natural Resources officials briefed state legislators Dec. 16 on their work reviewing the planned sale of BP’s Alaska assets to Hilcorp Energy. Commissioner Corri Feige said the sale needs DNR approval as well as that of the Regulatory Commission of Alaska for regulated pipeline assets. The regulatory commission is now completing a preliminary review of the “midstream” asset sale and in January will begin a formal review which will most likely involve public hearings. BP and Hilcorp hope to close the sale by mid-year but there is no formal timetable for the state’s reviews, Feige said. The state has retained National Economic Research Associates, Inc. to assist in the review.

An issue is Hilcorp’s financial capability to handle emergencies. Hilcorp has agreed to regular reporting to the state of financial information including annual and quarterly financial statements, a third-party estimate every three years of facility (mainly pipeline) dismantlement and restoration costs and reporting of reserves. Eyebrows were raised among legislators when Rep. Chris Tuck, D-Anch., asked who would be selecting the auditors to review Hilcorp’s financials. The response: It would be Hilcorp.

Busy winter exploration season shapes up for North Slope
At least five rigs will be operating on exploration drilling this winter on the North Slope, with four companies drilling 12 wells and “sidetracks,” or wells drilled off underground after an initial well is drilled. The busiest operators will be ConocoPhillips and Oil Search, but Eni Oil and Gas will resume drilling and testing its long extended-reach test well drilled out into federal Outer Continental Shelf leases. Accumulate Energy Alaska, a subsidiary of Australia-based 88 Energy, will also drill an exploration well. ConocoPhillips said it will employ about 1,400 people on winter work, with about half working on exploration and the remainder employed on construction of its GMT-2 project.

Doyon Ltd. and Hilcorp Energy sign deal to explore Yukon Flats
Hilcorp Energy and Doyon Ltd. signed an agreement for Hilcorp to undertake an oil and gas exploration program in the large Yukon Flats area north of Fairbanks where Native village corporations own lands and Doyon owns mineral rights. It is the first industry-sponsored program in the region in many years and it is also another step for Hilcorp in doing “wildcat” exploration. The company operates producing fields in Cook Inlet and on the North Slope and previously initiated an exploration program in Lower Cook Inlet, its first true “greenfield” exploration, prior to doing the Doyon deal. Hilcorp will initially do airborne gravity surveys and if results are positive will consider seismic and possible drilling.
BLM likely to release Central Yukon land plan in mid-2020

The U.S. Bureau of Land Management is working on the Draft
Environmental Impact Statement for the agency’s Central Alaska land plan, a document that will guide land actions across a huge area north and northeast of Fairbanks. There are hopes the DEIS will be complete and released this summer. State officials are watching closely to see if BLM will include a release of the decades-long Public Land Order that has closed a north-south corridor along the Trans Alaska Pipeline System to state selection or other types of land entry. The corridor is 16 to 16 miles wide and includes the pipeline. Like a lot of federal land orders the TAPS corridor closure order has long outlived its original purpose. If the order is lifted as a part of the Central Alaska land plan the state could select as much as a million acres of the remaining five million acres of state land selection entitlement.