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Hilcorp files plans with state of Alaska to restart oil drilling in Prudhoe Bay area

Hilcorp and fellow Prudhoe Bay owners ExxonMobil, ConocoPhillips and Chevron have agreed to restart drilling after more than a yearlong pause in response to the COVID-19 pandemic. (Loren Holmes / ADN archive)

Rigs will be likely drilling new wells again soon in one of the country’s largest oil fields if state regulators approve Hilcorp Energy’s amended annual work plans.

Representatives for Hilcorp North Slope LLC filed a proposed amendment to the company’s plan of development for the western satellite fields to Prudhoe Bay July 15 with the state Division of Oil and Gas indicating leaders of Hilcorp and the other Prudhoe owners have agreed to drill up to six wells in the Orion participating area by next spring.

The Orion participating area is in the far northwestern corner of the broad Prudhoe unit area. More specifically, Hilcorp plans to drill up to three producer wells and one injector from the field’s L-Pad and one producer and injector each from the Z-pad.

Hilcorp North Slope also indicated drilling of up to four new wells in the Lisburne and Point McIntyre areas in its 2021 plan of development, or POD, for the Greater Point McIntyre regulatory sub-area that is in the eastern portion of the Prudhoe Bay Unit.

Hilcorp North Slope is the subsidiary formed after its purchase of BP Exploration Inc. and is the operator position at Prudhoe Bay.

The 2021 Greater Point McIntyre POD would take effect Oct. 1 and run through September 2022.

Hilcorp representatives wrote in their multiple original 2021 PODs for the complex field — the first of which were submitted in January — that Hilcorp and the other Prudhoe Bay owners did not approve drilling this year because of pandemic-induced market conditions. At the time, it was presumed drilling would likely resume sometime next year.

The company drilled 10 wells in Prudhoe early last year before nearly all discretionary work was stopped Slope-wide in April in response to the pandemic, according to the development plans.

ConocoPhillips resumed its North Slope development drilling program late last year.

Hilcorp Senior Alaska Vice President Luke Saugier wrote in an emailed statement that the company is pleased to have support from the other Prudhoe owners to drill several wells in the coming months.

“The last year has been challenging but I’m proud of what our team has accomplished, including increasing production at Prudhoe Bay. We look forward to working with our Prudhoe Bay Partners, ConocoPhillips, ExxonMobil and Chevron, to continue to safely and responsibly develop Alaska’s natural resources,” Saugier wrote.

Hilcorp increased production at Prudhoe by 4 percent to approximately 198,600 barrels per day in the first 11 months after closing its $5.6 billion deal to buy BP out of Alaska over the most recent comparable period, according to the latest production figures available from Alaska Oil and Gas Conservation Commission.

While oil prices increased steadily through the first half of the year — prompting a quicker resumption of drilling at Prudhoe and of general activity industry-wide — the trend ended abruptly in recent days.

The price of Alaska North Slope crude fell $4.90 on July 19 to $68.67 per barrel after hitting a nearly three-year high of $76.49 just four trading days earlier. Analysts are attributing the drop to an agreement among OPEC countries to boost production slightly and rising COVID-19 case counts in the U.S. and elsewhere.

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