The Alaska Division of Oil and Gas has approved a Plan of Operations for Hilcorp Alaska to develop a new pad outside Ninilchik to support natural gas drilling operations.

The Alaska subsidiary of the Houston, Texas-based company has been expanding operations in its Ninilchik unit holdings since acquiring the unit in 2013 from Marathon. Last year, the company applied to the Alaska Division of Oil and Gas to build a new gravel pad in its Deep Creek Unit, located southeast of Ninilchik, to support new exploration wells there.

The most recent wells would be located in the Ninilchik Unit, on the west side of the Sterling Highway.

Under the operational plan, the company will build the approximately 1.78-acre pad and drill wells directionally to target natural gas discovered offshore, according to the operational plan.

“The angle of drilling to reach the offshore target leaves a limited surface area suitable for pad location,” the plan states.

Hilcorp plans to build the pad on Ninilchik Natives Association Inc. land, a village corporation with approximately 344 shareholders that owns tracts of land around the Ninilchik and Oilwell Road area as well as tracts of land on Cook Inlet’s west side.

Hilcorp worked with the Ninilchik Natives Association on the plans for the pad, and the name came from a Ninilchik Native word, said Greg Encelewski, the president of the Ninlchik Natives Association.

“In our language, (Kalotsa) means well,” he said.

The operational plan outlines a timeline beginning immediately for vegetation clearing, with the first drilling activities to begin in November. Eventually, Hilcorp tentatively plans to drill four wells at the site.

If the company sticks to its stated schedule, the construction of a gravel access road, pad and flowline would be finished by mid-November.

Drilling for the first well, exploration zones and expected development zones would begin in November and continue through April 2017, followed by well testing in May. The schedule will depend on weather, permitting and company scheduling, according to the operational plan.

“The project is expected to begin as soon as all applicable permits and authorizations are received,” the plan states. “The project schedule may change and dates may move forward or back.”

Drilling crews will be housed offsite, either at a man camp or in other lodging, according to the application. After drilling is completed, the pad will not be manned but will be monitored by personnel from the next-door Susan Dionne Pad. The gas will be sent there to be treated as well. The Kalotsa pad would have a heater/separator unit, communication building and a 200-barrel produced water tank on site.

The pad will be within one-half mile of the mean high water of Cook Inlet, which violates the state’s mitigation measures for environmental protection unless the land use plans classify an area for development or established usage and use history show development. However, the Division of Oil and Gas can grant an exception if the lessee can demonstrate that a site outside the buffer is not practical or if the location inside the buffer is environmentally preferred, according to the 2009 Cook Inlet Areawide Mitigation Measures Plan.

The gas and produced water will be sent to existing facilities at the Susan Dionne Pad and during drilling, temporary tanks and produced water storage tanks will be placed in secondary containment areas, lined and bermed, to reduce risk of a spill, according to the plan.

There is also one identified eagle nest near the proposed site. Surveyors identified it in December 2014 about 600 feet from the nearest point on the gravel access road, about 1,000 feet from the center of the proposed pad. The land clearing will take place outside the active breeding season, and the company expects no impacts to the nest from oil and gas activities, which will occur at least 660 feet away from the nest, according to the plan.

“Hilcorp will monitor the nest during pad construction and drilling activities to determine if the nest is occupied,” the plan states. “If the nest is determined to be occupied, it will be monitored during construction/drilling activities to detect any abnormal behavior of the adult eagles or their chicks; monitoring will continue until the chicks have successfully fledged (the eaglets are capable of strong, coordinated, independent flight.”

According to the operational plan, with the addition of the new pad, Hilcorp will operate nine pads across the Ninilchik Unit. The company completed its Greystone Well southeast of Ninilchik this summer, spudding in May, which is outside of existing units on land owned by Cook Inlet Region, Incorporated.

Elizabeth Earl is a reporter for the Peninsula Clarion. She can be reached at elizabeth.earl@peninsulaclarion.com.