Hilcorp purchases North Slope assets of Eni Oil and Gas

Hilcorp Alaska, a subsidiary of Houston-based independent Hilcorp Energy, has purchased the Alaska oil-producing assets of Eni Oil and Gas, Hilcorp announced June 26 in a statement. No purchase price was given.

This represents a substantial expansion of Hilcorp’s Alaska operations, which include ownership management of the Milne Point field on the slope as well as management and part ownership of the large Prudhoe Bay field.

Eni’s Alaska holdings include two small offshore oil fields on the North Slope, the Nikaitchuk and Oooguruk fields. Nikaitchuk produced an average of 16,000 barrels per day in 2023 while Oooguruk produced an average 6,000 barrels per day that year. Eni Alaska is a subsidiary of Eni, a major international company based in Rome.

Hilcorp now operates the Prudhoe Bay field, where it is approximately a one-third owner along with co-owners ConocoPhillips and Exxon Mobil. Prudhoe now produces about 300,000 barrels per day. Hilcorp is also operator and sole owner of the Milne Point field, now producing 50,000 barrels per day. The company also owns and operates oil and gas production facilities in Cook Inlet, in southern Alaska.

"The addition of the Oooguruk and Nikaitchuq assets seamlessly integrates with Hilcorp Alaska's existing portfolio, presenting us with an exceptional opportunity to invest and optimize operations in a way that will drive increased production,” Hilcorp Energy CEO Greg Lalicker said in a statement. “We will leverage our experience gained at Milne Point to further enhance the development of these assets, building upon the success achieved by Eni."

A key factor in the acquisition is that Hilcorp’s experience in developing large viscous oil deposits in the Milne Point field can be applied at Nikaitchchuq, which also produces viscous oil. Viscous oil is thicker, cooler and more difficult to produce than conventional “light” crude oil produced on the North Slope.

Hilcorp’s development of new technology, such as a polymer flood procedure for enhancing the Milne Point viscous oil production. could also play a role at Nikaitchchuq, industry sources said. The company is also working with the University of Alaska Fairbanks on using a variation of the polymer flood and a solvent flood to produce a very large undeveloped heavy oil resource found at the Milne Point field and in other North Slope fields.

Hilcorp has a reputation for acquiring mature producing assets and expanding production with aggressive redevelopment. The company acquired Milne Point from BP in 2015 and increased its production from 18,400 barrels per day in 2014 to 50,000 barrels per day currently. With development of a new production pad Hilcorp expects to expand Milne Point to 60,000 barrels per day over the next three years, according to industry sources.

The company has also managed, as operator, to keep Prudhoe Bay field production generally stable at about 300,000 barrels per day since becoming operator in 2020. Prudhoe is a mature field that first began producing in 1977. In contrast, other large but mature fields on the North Slope have been declining in production.

The company has done this through a combination of new drilling, repairing old wells and upgrading and expanding processing facilities.

A similar strategy was employed in Cook Inlet after 2012 and 2013 when Hilcorp purchased mature oil and gas assets from former Inlet producers Chevron Corp. and Marathon Oil. The company was able to increase oil producing from about 10,000 barrels per day to 16,000 barrels per day in a few years, although production has now declined to about 9,000 b/d, according to the Alaska’s state Division of Oil and Gas.