Hilcorp fined $260,477 for missing integrity test at Milne Point well on Alaska’s North Slope

Alaska regulators on Thursday ordered Hilcorp to pay a $260,477 penalty for failing to conduct a required test of the integrity of a well at the company’s Milne Point Unit on the North Slope.

The decision and order issued by the Alaska Oil and Gas Conservation Commission came two days after the commission ordered Hilcorp to pay $452,100 for separate violations concerning unauthorized injections into oil pools within the Prudhoe Bay Unit.

The order issued Thursday said Hilcorp was injecting fluids into the Milne Point well in September, well after the March deadline for performing an integrity test at the site.

Such integrity tests check the ability of the wells to withstand pressure.

A state rule requires the integrity tests to be conducted prior to any initial injections after well workovers — a term for overhauls of well equipment — and at least once every four years, the order said. The last AOGCC-witnessed test on this well was on March 16, 2019, the order said.

Hilcorp notified the commission on Sept. 16 that it had been injecting fluids into the well after failing to perform the required four-year test, the order said. Hilcorp ceased its injection process, which had started on April 1, and shut in the well, the order said. Shut in wells are made inactive and no longer producing.

The penalty assessed against Hilcorp was reduced from the $303,500 that the AOGCC initially sought in a proposed enforcement action issued on Dec. 1. Hilcorp subsequently presented information that justified the reduction, the commission’s order said.

Hilcorp conducted its own investigation of the lapse in required well testing, as it did with the unauthorized injections that were the subject of the enforcement order announced on Tuesday, Thursday’s order said. The company will not be required to submit any further written report to the commission, the order said.

Luke Miller, a spokesperson for Hilcorp, released a brief comment about the latest enforcement action. “We look forward to continuing to work closely with AOGCC to ensure compliant, safe and responsible operations,” Miller said.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.