Little projects add up to no oil production decline at Prudhoe

Hilcorp Alaska has arrested a longstanding downward trend in oil production at Prudhoe Bay in the year-plus the company has run the iconic North Slope field but, according to Hilcorp leaders, it isn’t the result of anything particularly big or drastic the company has done.

Rather, it has been “hundreds of fairly small projects” that have combined to add enough production to bend the decline curve quite abruptly, said Jill Fisk, senior asset team lead at Prudhoe Bay West for the normally tight-lipped Hilcorp.

In some cases it has been as simple as returning idled equipment back to service.

Production rates have been increased at drill sites across the expansive field as the company has brought more wells online, “not by drilling new ones, but by repairing and returning to production the ones we have,” Fisk said.

Facility repairs will allow Hilcorp to return a drill pad to service at the Lisburne satellite field as well.

“We now have a record number of wells online in the western satellite fields (of Prudhoe),” she said.

Hilcorp assumed operations at Prudhoe Bay in July 2020, culminating the company’s $5.6 billion purchase of BP’s remaining Alaska assets. The Houston-based producer is scheduled to take over operations at the Point Thomson North Slope gas field by early next year as well, part of a separate, non-monetary agreement with ExxonMobil, the majority owner and current operator.

Hilcorp also increased facility “uptime” at Prudhoe from 85% to 94% in its first year at Prudhoe, another incremental production improvement, according to Fisk.

She spoke during a virtual edition of the Resource Development Council for Alaska’s annual conference on Nov. 17.

Many facilities at the mature field have long acted as a de facto limit on production capacity because of the need to process water and natural gas produced alongside the oil. To that end, Hilcorp has worked to increase daily water throughput by approximately 200,000 barrels per day year-over-year, according to Fisk, and additional projects to increase gas handling capacity have added roughly 15,000 barrels of new production per day.

“When you can move more gas or move more water you can make more oil,” Fisk said.

According to Hilcorp’s figures, the average daily oil production capacity at Prudhoe has been flat at just less than 290,000 barrels since the company took over the field. That followed years of capacity decline of about 4% per year.

Raw production data from the Alaska Department of Revenue largely backs up the company’s numbers. The volume of oil produced and processed through Prudhoe Bay facilities averaged just over 304,000 barrels per day in October, up from an average of approximately 299,000 barrels per day in October 2020 and 271,000 barrels per day in 2019. While oil production volumes for a given month can be influenced by temperature differences and facility maintenance, the stabilized production trend is generally consistent across the calendar.

“This achievement is due to the hundreds of projects executed all across the field by the hundreds of people all working towards the same goals,” Fisk said.

Hilcorp resumed development drilling at Prudhoe this fall after drilling was stopped after the collapse of oil prices at the onset of the pandemic. The initial drilling is focused on Schrader Bluff reservoirs in the western satellite fields; the same formation targeted for enhanced production at the Milne Point field via polymer flooding techniques.

“We will extend our experience and knowledge base from Milne into Prudhoe,” Fisk said.

The company is now more than three years into a long-term reservoir flood experiment with U.S. Department of Energy researchers to test the effectiveness of polymer-based liquids to recover heavy oil from Milne Point. Hilcorp representatives have said as the project has progressed that early promising signs are translating into strong results.

According to Fisk, the polymer test floods have economically produced about 630,000 barrels of oil over what could have been achieved with a traditional water flood of the Milne Point reservoirs.

“(Hilcorp) is on track to deliver one of the most successful polymer floods in the world as far as current results go,” she said.

On the other end of the state, Hilcorp will continue steady development of its Cook Inlet gas resources, according to Fisk, which includes full-time work for onshore and offshore drilling and well repair rigs into next year.

Hilcorp is the primary supplier of natural gas to Southcentral region utilities.

After a delay, gas production has commenced from the Seaview drill pad in Anchor Point and the company plans to drill an exploration well at nearby Whiskey Gulch soon, Fisk said.

Hilcorp previously received approvals from state regulators to drill two oil and gas exploration wells over the summer from an onshore pad at Whiskey Gulch, just outside of the Seaview unit. Those wells, according to plans filed with the state, targeted Sterling, Beluga and Tyonek gas formations as well as underlying oil prospects.

Fisk said Hilcorp is also working to replace pipelines associated with the Middle Ground Shoal platform to bring the offshore field back into production.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.