Where other independents are in the midst of exploration plans, Houston-based Hilcorp’s agenda is to keep producing from Chevron’s assets, then look toward future exploration.
“We want to grow, we want to stay and we want to produce,” said John Barnes, head of Hilcorp’s Alaska operations, at the Kenai Chamber of Commerce’s lunch Wednesday.
The company, which has 240 Alaska employees, acquired Chevron’s Cook Inlet assets last summer.
Those assets include onshore and offshore leases for both oil and natural gas, and are producing about 19,000 barrels of oil equivalent per day. The company has platforms in the Cook Inlet, and leases near the Swanson River, Ninilchik and other Kenai Peninsula and west side of Cook Inlet sites. Trading Bay Unit northwest of Nikiski in Cook Inlet, and the nearby McArthur River Field, are two of the major holdings for the company,
“We’re everywhere,” Barnes said.
Hilcorp also has leases near the southern Peninsula community Nikolaevsk. At the time it sold its assets to Hilcorp, Chevron was working on a development plan for those leases with the state of Alaska. Barnes said Hilcorp is continuing with that effort.
“We are looking hard at trying to get on production,” Barnes said of that unit.
Hilcorp plans to pursue both oil and gas production, Barnes said.
“We have a preference to make money,” he said.
The company’s current assets form the basis of Hilcorp’s operating plans, but not the entirety of them.
“We will be looking at the assets we bought, and tearing through those and trying to get production there,” Barnes said.
But the company will shut down production at those sites as necessary, and explore new sites where it sees fit and as its finances allow.
“We want to live within our cash flow,” Barnes said.
Over time, the company plans to add additional wells. Barnes said Hilcorp is talking to Apache Corporation, another independent with a sizable lease position in the inlet, about sharing the seismic work Apache is undertaking. That would help determine where exploration could take place, Barnes said.
“More wells drilled ought to mean more production,” Barnes said.
Barnes said Hilcorp will operate its own fields, though it will hire contractors for some jobs. Its goal, however, is to provide a steady base of jobs rather than the boom-and-bust cycle of employment that sometimes hits development-related contractors on the Kenai Peninsula.
In response to a question, Barnes said Hilcorp had three major considerations in coming to Alaska: the quality of the assets it was acquiring, a stable environment in terms of taxes and regulations.
Overall, Barnes said stability is crucial for operators, and he thought the current Cook Inlet incentives offer a reasonable working environment.
“The delegation took a really balanced view when they put that together,” Barnes said.
Molly Dischner can be reached at email@example.com.