Hilcorp starts production at Moose Pad oil project

More oil is now being produced on the North Slope, and explorers are finding even more.

Hilcorp Energy has started production at its new Moose Pad oil project in the Milne Point field on the North Slope, company officials said.

Milne Point is adjacent to the large Prudhoe Bay field and is owned 50-50 by Hilcorp and BP but operated by Hilcorp. The company is also the major oil and gas producer in Cook Inlet.

Further south on the North Slope an independent exploration firm has discovered new oil near the Dalton Highway and the Trans Alaska Pipeline System. The find was from a redrill of an unsuccessful well drilled several years ago.

The initial flow-rate from the new well was small but it will be increased with the application of advanced production technologies.

At Moose Pad, “Production at Moose Pad came online in early April at an initial rate of 3,000 barrels per day flowing from two wells,” Lori Nelson, a Hilcorp spokesperson, said in an email.

“Peak production is anticipated to be approximately 22,000 barrels per day,” she said.

Drilling and facility construction activities are continuing. “The facilities will make it possible to bring on additional production from our planned total of more than twenty-five producing wells,” Nelson said.

Moose Pad is at the western edge of the Milne Point field near the Kuparuk River field boundary. The 14-acre pad is the first new production pad built in Milne Point since 2002.

Hilcorp will invest over $400 million to build and develop Moose Pad and its facilities. The company is planning for growth at the project. David Wilkins, Hilcorp’s senior vice president for Alaska, told an industry conference in Anchorage last November that an oil processing plant built on the 14-acre Moose Pad is capable of handling 85,000 barrels per day of fluids, and the pad itself is designed to accommodate up to 50 wells. To the south, the new discovery near the Dalton Highway is by London-based independent Pantheon Resources, which acquired Great Bear Petroleum, an Alaskan independent company, earlier this year.

Pantheon has now moved into development planning for its small oil discovery, said Pat Galvin, the company’s Alaska vice president.

Pantheon drilled a new well off the Alkaid 1 well drilled in 2015 and achieved a test flow rate 80 barrels per day to 100 barrels per day from a six-foot well section, Pantheon said in its announcement of the find.

The company believes the discovery can be commercially developed and its production increased by using horizontal production wells and stimulation of the wells to increase production.

Unlike many oil discoveries on the slope that are remote, requiring expensive infrastructure, Alkaid is adjacent to the Dalton Highway and the Trans Alaska Pipeline System.

“The flow rate indicates the potential of higher rates when conventional North Slope production techniques like horizontal wells and stimulation is applied to larger intervals of reservoir,” Pantheon said in a statement,” Pantheon said.

The test was conducted in a 240-foot interval of oil-saturated reservoir. The new find has also upgraded the potential of an adjacent oil accumulation which can be developed from the Alkaid location, the company said.

Alkaid was originally drilled by Great Bear Petroleum, which Pantheon acquired in January. At the time Great Bear was pursuing deeper prospects for shale oil production from large shale formations that are known source rocks for the large producing oil fields farther north, including Prudhoe Bay.

Great Bear drilled two shale tests including Alkaid but failed to find sufficient oil in the shale for commercial development. However, during the drilling conventional oil prospects were also detected, which Pantheon is now exploring.

One technical challenge is that while the find is virtually next door to the 48-inch TAPS line Pantheon would still have to get its oil processed to remove water and any gas and must also pay for a connection to the pipeline.

The processing problem could be solved by using small modular process kits being developed by contractors for the Mustang, another small slope discovery near a pipeline, but the connection to TAPS must still be paid for.

An alternative, as least initially, would a plan studied by Great Bear to truck crude oil north to Prudhoe Bay, processing the oil there and injecting it into TAPS at Pump Station One.