Integrity Urgency Ownership Alignment Innovation
We are often asked… Why buy into Cook Inlet?
COOK INLET: The positives Legacy oil and gas basin with giant fields Access to land Rule of law Stable fiscal policy
The History of Cook Inlet OIL First commercial discovery: 1957 at Swanson River Field First oil production: 1958 Peak oil production: 227,000 BOPD in 1970 December 2011 oil rate: 11,000 BOPD GAS First gas encountered: 1950s First and largest commercial discovery: 1959 Kenai Gas Field First gas production: 1961 Gas production/sales peak: BCF (580 mmscfd) Current gas production/sales: BCF (246.5 mmscfd)
HILCORP: Making Headway
ONSHORE: New drilling rigs Swanson River Field Ninilchik, SD8
OFFSHORE: Enhancing Operations BUILT FOR PURPOSE PULLING UNITS MONCLA RIG 301 Granite Point Platform Bruce Platform HAK #1 Dolly Varden Platform King Salmon Platform Granite Point Platform
Increased field activity
Oil Production
Cook Inlet Oil Production Thousands of Barrels per Day
Support Industry is Critical INCREASED DEMAND FOR SUPPORT SERVICES 2013 More than 835,000 Contract Man Hours with Alaska-based service companies = More than 400 FT Jobs
Sell more gas
Gas Pipeline Consolidation 4 COMMON CARRIER GAS PIPELINES Kenai Nikiski Pipeline Cook Inlet Gas Gathering System Kenai Kachemak Pipeline Beluga Pipeline WHY? Builds efficiencies for Hilcorp & shippers WHAT CHANGES? Tariff will transition to Postage Stamp Rate Costs will be spread throughout the system Nomination process is greatly simplified HOW? Settlement approach with the RCA
Invest for the future 2013 Investment $338.7MM
Community minded employees Nearly 500 grants to Alaskan 501(c)3 Organizations
HAK Financial Impact $814MM $80MM $96MM $8MM Govt Payments Royalty to Individuals Payroll Goods & Services
Cook Inlet Outlook: Half-full or Half-Empty? $814MM $80MM $96MM HALF FULL In the Cook Inlet region, the USGS estimates mean undiscovered volumes of nearly 600 million barrels of oil, about 19 trillion cubic feet of gas, and about 46 million barrels of natural gas liquids New entrants, increased activity Contractor base getting stronger Encouraging results HALF EMPTY Constrained natural gas market Risk of regulation creep
Why NOT Cook Inlet?