State ends Hilcorp's idle Cook Inlet unit but gives it three years to decide on a restart

The state on Wednesday agreed to end Hilcorp Alaska's North Trading Bay Unit, home to two Cook Inlet oil platforms that have not produced in decades, but gave the company three more years to decide whether to bring one of them back into production.

Haley Paine, director of the Alaska Division of Oil and Gas, approved Hilcorp's request to dissolve the unit Nov. 1 and to suspend production on its three state leases through Oct. 31, 2029, according to the division's decision. Hilcorp asked for both in August, Alaska News reported Aug. 4. The suspension lets it keep the leases without producing. Hilcorp acknowledged it still owes rent and royalties, and the decision says ending the unit does not release it from plugging the wells, removing the platforms and restoring the site.

The Spark and Spurr platforms were built in 1968. Neither has produced oil since 1992. Spark produced gas until 2005, and its wells are plugged. Spurr still has nine wells. Both sit unmanned in what the decision calls lighthouse mode, with little running but navigation lights and corrosion protection. Crews visit at least once a month.

The unit sits in a basin running short of gas. Cook Inlet gas production fell to 61 billion cubic feet in 2025, about what the region uses in a year, leaving no winter cushion, Alaska News reported June 15. The state's 2025 approval for the unit referred to both gas and oil targets.

When Hilcorp took over the platforms from Marathon Oil in 2013, Marathon had a long-term plan to abandon them. Hilcorp developed plans to restore production instead.

The division tried once before to end the unit, in May 2019, finding no diligent work to restore production. The natural resources commissioner reversed that decision in March 2020, but said the unit would end automatically if Hilcorp did not drill its targets. Hilcorp tried to reach the unit with sidetrack wells from a neighboring platform twice in 2022 and twice in 2023. All four failed. In 2023, an unstable hole led to a drill pipe failure, and equipment was left in the well.

In its 2023 and 2024 development plans, Hilcorp said the Spark and Spurr platforms were no longer suitable for drilling or production, according to the decision, while committing to study whether they could be refurbished. After a 2025 assessment, Hilcorp concluded Spurr "may be economically viable" to restart, but would need new living quarters, a crane, production equipment and environmental cleanup in its well modules.

The state's 2025 approval required Hilcorp to decide by May 1 of this year whether refurbishing the platforms made economic sense. If Hilcorp found it did not, the unit would end automatically and the platforms would move toward dismantlement. In documents for a June technical meeting, Hilcorp told the division it had not made that decision and that its timeline for possible production had slipped by three more years.

In an Aug. 3 letter, Hilcorp landman Luke Suchecki wrote that the suspension would let the company meet state plugging requirements "while preserving wells with potential future utility." The division found that the plan protects the public interest by giving Hilcorp time to finish its plugging work, repair the Spurr Platform and "ultimately determine if the Spurr Platform can be brought back into production."

The plugging has been delayed before. Hilcorp had committed to plug the unit's wells during its 2024 plan period under an agreement with the Alaska Oil and Gas Conservation Commission, then put the work behind its former Middle Ground Shoal platforms, saying wells there posed a higher risk. The commission now requires the Spurr wells plugged by Nov. 16, 2028. Hilcorp plans to plug five and ask the commission to keep four suspended for possible future use.

Under the new plan, Hilcorp committed to finish repairs needed for the plugging work by the end of 2027, test the pipeline between the two platforms by the end of 2028 and make a funding and development decision by March 31, 2029, seven months before the suspension ends.

Eligible parties affected by the decision have 20 days to appeal to the natural resources commissioner.