Hilcorp Alaska: Powering Southcentral Alaska’s past, present, and future

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Luke Saugier, Hilcorp

By LUKE SAUGIER

For over a decade, Hilcorp Alaska has been proud to be the driving force in the Cook Inlet basin, investing significantly in Southcentral Alaska. When we entered the Alaska market, the basin was in rapid decline, and few investors were willing or able to put up the capital required to produce more oil and gas from the aging fields. Since then, we’ve invested more than a billion dollars in the Cook Inlet basin, generating well over 700 billion cubic feet of natural gas to power and heat Alaskan homes and businesses.

Our team of more than 1,500 Alaska employees has worked to stabilize the natural gas supply for the Railbelt. Our efforts have included drilling more than 155 new wells, implementing new technologies, and repairing aging infrastructure. And recently, Hilcorp made a long-term commitment to ensure the only jack-up drilling rig in Alaska doesn’t leave the state at this critical time.

Unfortunately, aside from Hilcorp Alaska, industry investment in the Cook Inlet basin has continued to decline, making our operations increasingly difficult. The necessary equipment is hard to source, especially on short notice, and contractor services are hard to find. In addition, the federal permitting processes are more tedious than ever. These challenges all layer on top of what is already only a six-month offshore drilling season.

Even with these headwinds making operations difficult, Hilcorp Alaska is deepening its commitment to the Cook Inlet, planning to deploy up to four drilling rigs to add 15 to 20 new wells annually over the next five years. This near-billion-dollar investment is crucial not only to sustain our current operations, but also to meet future needs, despite the 30% year-over-year production decline that’s common in Cook Inlet wells. 

We are doing what we can, where we can. During the recent cold spell in February, when the utility-owned gas storage facility faced operational issues, Hilcorp Alaska did not just meet, but exceeded its contractual obligations by releasing additional gas reserves to ensure uninterrupted energy supply without increasing prices. Similarly, even as our contract with Homer Electric Association concluded in March 2024, we provided an extra year of gas supply at stable prices, smoothing their transition to other energy sources. And we are collaborating with the utilities and regulatory agencies to make our gas storage assets available for commercial use. 

Hilcorp Alaska has and will continue to fully develop our Cook Inlet basin leasehold with a specific focus on delivering a reliable and affordable supply of natural gas.

As Hilcorp Alaska continues to invest in and expand our natural gas production in the Cook Inlet basin, we remain in constant contact with utilities, state and local governments, and the community. With so many Alaskans living and working for Hilcorp Alaska, our employees are personally committed to delivering lasting energy solutions for Alaska.

By Luke Saugier is the senior vice president of Hilcorp Alaska.

14 COMMENTS

  1. Yeah…. No. You should probably pay the same taxes every other massive organization that extracts OUR resources. You’re not special and you ain’t from here.

  2. So now Hilcorp is going to be Alaska’s “savior” when things are going down hill quickly? I can only keep envisioning the democrat promises that are never kept or are opposite of what they promise.

  3. Jim White is Alaska’s savior . Mr White sued to lower bonding requirements on drilling gas wells in South Central . In court for years and finally prevailed for the property owners in SouthCentral . May you rest in Peace JimWhite ! What a legacy to leave .

    Now people who own the oil and gas rights under their property can drill a gas well with a truck mounted rig and heat their homes and businesses .

    This will create an absolute gold rush in Alaska . HilCorp is not needed to accomplish this . Individuals can do this on their own . This is probably the biggest court ruling in Alaska history as side from the congressional ruling that allowed the Trans Alaska Pipeline to be built .

    What is very interesting is the local media has not reported this ? Crickets , Huge story ! Thank you Jim White

  4. Jim White is Alaska’s savior . Mr White sued to lower bonding requirements on drilling gas wells in South Central . In court for years and finally prevailed for the property owners in SouthCentral . May you rest in Peace JimWhite ! What a legacy to leave .

    Now people who own the oil and gas rights under their property can drill a gas well with a truck mounted rig and heat their homes and businesses .

    This will create an absolute gold rush in Alaska . HilCorp is not needed to accomplish this . Individuals can do this on their own . This is probably the biggest most significant court ruling in Alaskan history aside from the congressional ruling that allowed the Trans Alaska Pipeline to be built .

    What is very interesting is the local media has not reported this ? Crickets , Huge story ! Thank you Jim White

  5. Alaskans should support a Renewable Portfolio Standard (RPS) will give investors certainty in the long term investments required for wind and solar return on equity. This is preferable to Hilcorp threats and empty promises

    • Frank – the RPS is an unequivocally bad idea. It cites only hydro, wind, solar, and tidal. Other than hydro, these are inverter based renewables (IBRs) and are insufficient for powering the Alaska grid. As an aside, I question the major RPS backers – REAP and the Alaska Center for the Environment, as to their commitment to hydro, as they are the ones clamoring for the removal of Eklutna hydro. That’s the real technical story, despite what the “true believers” will tell you. The RPS also does not allow for clean coal (even with carbon capture and sequestration), and emerging technologies, including small nuclear.

      Philosophically, do you really want legislators who don’t have expertise in energy development dictating what engineers and planners at the utilities can use as generation sources? I don’t.

      The Southcentral utilities are way behind the curve on generation planning right now, which is why the discussion is happening about importing LNG, which is going to be very expensive.

      If you want more of what we have now – higher rates and an imminent reduction of reliability, lets keep supporting the agenda of the green lobby.

  6. Hilcorp will suck every dime they can out of the wells in Cook Inlet, avoid paying taxes by being a S Corporation. Don’t worry when they are done sucking out the money they will leave everything behind for someone else to clean up.

  7. no support companies to help sustain operations. gee those companies leaving the north road 5-10 years ago isn’t news. two brown sites sitting and rusting for two decades, not going anywhere will one staff “explores” options

    gonna be a tough 20 going forwards, loss of youth, loss of energy, rich boomers dying daily? bleak outlook

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