Hilcorp acquires additional Inlet oil assets
Hilcorp Alaska will purchase XTO Energy assets in the Middle Ground Shoal of Cook Inlet and is also studying a possible restart of a shut-in platform in the field.
Two oil-producing platforms, tank facilities and an office and support facilities at Nikiski, near Kenai, are included in the purchase deal with XTO, the company said in a statement issued July 6.
“Hilcorp anticipates making offers to all 31 employees that currently operate the Middle Ground Shoal assets,” spokeswoman Lori Nelson wrote in an email.
Meanwhile, Hilcorp is also studying a possible restart of one of two shut-in platforms also in the Middle Ground Shoal field. There were four platforms installed in Middle Ground Shoal, one of the earliest offshore producing fields in Cook Inlet, but only two platforms are still producing.
The purchase announced July 6 includes the operating “A” and “C” platforms, originally built in 1965, which produce about 1,750 barrels of oil per day, Nelson said. XTO is a subsidiary of ExxonMobil Corp.
A and C platforms are two remaining producers of four platforms that once produced oil from Middle Ground Shoal. Two other platforms, Baker and Dillon, were shut in several years ago by Chevron Corp., then the owner and operator. Hilcorp Alaska now owns the Baker and Dillon platforms.
Hilcorp purchased Cook Inlet offshore oil platforms formerly owned by Chevron in 2012 and has rejuvenated several platforms after considerable investment.
When Hilcorp purchased Chevron’s Cook Inlet oil producing assets in 2012 they were producing 17,000 to 18,000 barrels per day. By late 2014 Hilcorp had built the production back to almost 40,000 barrels per day. The company has been investing about $350 million a year rejuvenating old wells and production facilities, Hilcorp officials have said.
The company has been investigating a reactivation and production restart at the shut-in Baker platform but the work was interrupted by a fire in October 2014.
“We are focused on reconstruction and repair of the Baker at this time. We don’t anticipate reactivation until sometime next year,” Nelson said.
The transaction with XTO will close sometime this fall following approvals of state agencies and regulatory officials, Nelson said.