Opinion: Empowering South Central Alaska’s past, present and future

Has been updated: 1 1 hour ago release date: 1 1 hour ago

For more than a decade, Hilcorp Alaska has been proud to be a driving force in the Cook Inlet watershed and has made significant investments in southcentral Alaska. When we entered the Alaska market, the basin was in rapid decline and had the willingness and ability to put in the money needed to produce more oil and gas from aging oil fields. There were very few investors. Since then, the company has invested more than $1 billion in the Cook Inlet watershed and produced well over 700 billion cubic feet of natural gas to power and heat Alaska’s homes and businesses.

Our team of more than 1,500 Alaska employees has been working to stabilize natural gas supplies to the railbelt. Our efforts include drilling more than 155 new wells, implementing new technology, and rehabilitating aging infrastructure. And recently, Hilcorp made a long-term commitment to ensure that Alaska’s only jackup rig does not leave the state during this critical period.

Unfortunately, with the exception of Hilcorp Alaska, industrial investment in the Cook Inlet region continues to decline, making our operations increasingly difficult. Procuring the necessary equipment can be difficult, especially on short notice, and finding the services of contractors can also be difficult. Additionally, the federal permitting process is more cumbersome than ever. All of these challenges coincide with an offshore drilling season that is already only six months long.

Despite these headwinds complicating operations, Hilcorp Alaska is stepping up its efforts in Cook Inlet, deploying up to four rigs over the next five years and 15 to 20 drilling rigs each year. The company plans to add new wells. This nearly $1 billion investment is critical to not only maintaining current operations but also meeting future needs despite the 30% year-on-year production decline that is common in Cook Inlet oil wells.

We are doing what we can, where we can. When utility-owned gas storage facilities faced operational issues during the recent cold snap in February, Hilcorp Alaska required additional supplies to ensure uninterrupted energy supply without increasing prices. By releasing our gas reserves, we not only met our contractual obligations, we exceeded them. Similarly, his contract with Homer Electric Association ended in March 2024, but provided an additional year of gas supply at a stable price, smoothing the transition to other energy sources. We are also working with utilities and regulators to bring our gas storage assets to commercial use.

Hilcorp Alaska has fully developed, and intends to continue to develop, its Cook Inlet Basin leasehold interests with a particular focus on providing reliable and affordable natural gas supply.

As Hilcorp Alaska continues to invest in and expand natural gas production in the Cook Inlet Basin, we remain in constant communication with utilities, state and local governments, and local communities. With so many Alaskans living and working at Hilcorp Alaska, our employees are personally committed to providing Alaska with lasting energy solutions.

Luke Saugier is a senior vice president at Hilcorp Alaska.

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