HEX plans to triple its gas deliveries, enough to cover a tenth of demand

HEX LLC says it has doubled the well capacity of its Cook Inlet platform, from six wells to as many as 14, and plans to triple the gas it is contractually obligated to deliver to ENSTAR starting in April 2027.

The announcement came from AIDEA, the state development authority, which is HEX's lender. AIDEA holds a $50 million revolving line of credit to the company and released money from it last year.

Set against the size of the problem, the increase is modest. HEX currently commits 8.1 million cubic feet a day to ENSTAR as firm gas, meaning volume it must deliver on demand rather than when convenient. Tripling that would put it near 24 million cubic feet a day. The Alaska Division of Oil and Gas has found that identified Cook Inlet volumes can meet regional demand of roughly 80 billion cubic feet a year, about 220 million cubic feet a day, only until around 2030. HEX's expanded commitment would cover about a tenth of that.

The basin it is drilling in has been shrinking for 30 years. ENSTAR President John Sims told a forum in Anchorage in June that Cook Inlet now produces 60 to 70 billion cubic feet a year, down from more than 300 at its early-1990s peak, and that the Hilcorp contract carrying Southcentral runs out in 2033. Cook Inlet gas reaches about 75 percent of Alaskans through the Railbelt grid. The Alaska Energy Authority has warned the Railbelt cannot count on the basin indefinitely and should diversify.

HEX says its cumulative Cook Inlet investment now tops $90 million, about $50 million of it this year, that the drilling season involves more than 25 local suppliers, and that in 2025 it doubled production and supplied roughly 10 percent of Cook Inlet gas from six wells. This year's campaign uses a jack-up rig and a system that allows two wells from a single slot, targeting depths beyond 9,000 feet.

The company also announced an agreement with Tyonek Native Corporation covering exploration across more than 5,000 acres of Tyonek surface land, with provisions on subsistence resources, hiring and shareholder contracting.