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Hilcorp applies for Moose Pad development to tap 7 square miles of oil reserves

  • Author: Alex DeMarban
  • Updated: September 20, 2016
  • Published September 20, 2016

North Slope newcomer Hilcorp Alaska is planning to buck the trend of decline in the state's big oil patch and undertake a new development known as Moose Pad, with space for up to 44 wells designed to reach about 7 square miles of undeveloped oil reserves in the Milne Point unit.

The expansion at the unit, 25 miles west of Prudhoe Bay, is described in permit applications recently filed with state and federal agencies, including in a plan of operations submitted to the Alaska Department of Natural Resources on Monday.

The proposal comes despite a slowdown in the state's oil patch, with a long-running oil price slump reducing employment in the industry by at least 2,400 jobs in 18 months, from 14,800 jobs in March 2015, according to state data.

Hilcorp hopes to launch construction in December with a 1.5-mile ice road — once the tundra is sufficiently hardened by snow and ice. Mining operations would begin then, too, with Hilcorp Alaska collecting gravel from a site under a contract with the DNR.

Drilling would start in September 2018 after two winter construction seasons, according to the plan filed with the state. A 3-mile gravel road and pipeline to reach existing facilities would be built.

An estimated 236,550 cubic yards of gravel would fill wetlands at the site, with much of that to build the 17-acre pad to support drilling operations, according to an application for a wetlands fill permit from the U.S. Army Corps of Engineers.

Hilcorp acquired half the interest in the Milne Point field as a part of a deal with BP announced in 2014. The two companies share ownership at the field, which produces about 20,000 barrels of oil daily.

The agreement with BP also brought Houston, Texas-based Hilcorp other North Slope prospects, including half the Liberty Field where Hilcorp is taking steps to develop the first producing oil-field unit located entirely in the federal outer continental shelf off Alaska.

Hilcorp estimates Liberty could add up to 70,000 barrels of oil daily to the trans-Alaska pipeline, boosting the pipeline's roughly 500,000 barrels daily throughput.

The applications for the Milne Point expansion do not provide details on estimated cost or the amount of additional oil expected to be produced.

The state is just launching its review of the application, said Kim Kruse, permitting manager at the Alaska Division of Oil and Gas.

The Army Corp will accept public comments on the proposal through Oct. 17.