Hilcorp to Add BP's Longstanding Alaskan Facilities to $3 Billion in Existing Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hilcorp Alaska LLC, a subsidiary of Hilcorp Energy Company (Houston, Texas), is expanding its presence in the Land of the Midnight Sun with a $5.6 billion purchase of BP plc's (NYSE:BP) (London, England) assets on Alaska's North Slope. The sale, which requires approval from federal and state regulators, covers the Prudhoe Bay oil field and the trans-Alaska pipeline. Industrial Info is tracking nearly $3 billion in existing Hilcorp projects.

Click on the image at right for a graph detailing Hilcorp's active U.S. projects, not including assets it plans to acquire from BP, by project type.

BP's Alaskan assets include Prudhoe Bay, which is the most prolific oil field in U.S. history. Prudhoe Bay has produced more than 13 billion barrels of oil since BP drilled its first well in 1968. BP's net oil production from Alaska in 2019 is expected to average almost 74,000 barrels per day (BBL/d), according to a company press release.

Click here for a list of existing BP assets in Alaska tracked by Industrial Info.

The acquisition is welcome news for Hilcorp, which is struggling to move forward on its own massive project in the state: the estimated $3 billion Liberty Energy Project, which would produce oil from an artificial offshore island. Although the U.S. Department of the Interior approved the project last year, five conservation groups soon filed a lawsuit with the 9th U.S. Circuit Court of Appeals seeking to block oil production. The groups said the plan violates federal law governing outer continental shelf drilling, the environment and endangered species, according to Alaska Journal.

The multi-phase Liberty Energy Project, which is mired in a lengthy permitting process regardless of whatever the court decides, includes:

• an oil and gas production field, which would produce 70,000 BBL/d of crude oil and 140 million standard cubic feet per day of natural gas; see project report
• a production and processing plant, which would be built on the gravel-reinforced artificial island; see project report
• a gas-fired cogeneration unit, which would supply the facility with 40 megawatts (MW); see project report
• a oil pipeline extension, which would run more than seven miles and connect the island with an existing line; see project report

BP currently holds non-operating interests in the Liberty project.

Hilcorp also has some production projects in one of the nation's busiest energy corners: the Texas Gulf Coast. The company is at work on a $22 million drilling program in a Refugio County gas field, which includes five new horizontal wells and seven vertical re-completion wells, and an oil-recovery drilling program in Vanderbilt, which involves drilling 158 injection wells and 164 production wells through 2020. The Vanderbilt project will inject saltwater and carbon dioxide into the ground to boost oil production. For more information, see Industrial Info's reports on the Refugio County and Vanderbilt projects.

"Hilcorp has a proven track record of bringing new life to mature basins, including Alaska's Cook Inlet and the North Slope, and we have a clear understanding that an experienced local workforce is critical to success," said Jason Rebrook, president of Hilcorp, in a press release.

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