HEX but also needs it for work on its own development drilling. Hedrix said he is working on a plan to bring a sec - ond jack-up rig to the Inlet. The new gas is being welcomed because existing gas producing fields in Cook Inlet are expected to begin declining in 2027. The decline will be gradual but if HEX can drill enough to provide 20 million cubic feet of new gas yearly it could supply increments of new gas to the regional utilities, making a dent in the gas supply deficit and reducing the amount that will have to be imported as liquefied natural gas, or LNG. Hilcorp Energy, the major Cook Inlet gas producer, is also drilling for new gas near its ex - isting gas wells. Imports of LNG will be needed in any event to augment declining local production, regional utilities say. About 190 million cubic feet a day is produced and consumed in Southcentral Alaska. The state of Alaska has stepped in to help HEX. The Alaska Industrial Development and Export Authority, or AIDEA, the state’s development finance agency, is providing a multi- year, $50 million revolving line of credit to support the development. HEX is investing $40 million in 2025 in its two new wells. “This funding is critical to keep - ing Alaska’s energy resources de - veloped by Alaskans, for Alaskans,” Hendrix said. The partnership between AIDEA and HEX demonstrates how pub - lic-private collaboration can move quickly to meet demand with Alas - kan solutions, AIDEA Board Chair - man Dana Pruhs said. “AIDEA’s mission is to foster sus - tainable economic growth, and this investment in HEX Cook Inlet is a prime example of that,” Pruhs said. The state Department of Natu - ral Resources has also stepped in by negotiating a reduction of the state’s normal one-eighth royalty from the gas production. While this will result in a small reduction of revenues to the state treasury, the benefit of additional en - ergy security for Southcentral Alas - ka communities will by worth that. Southcentral Alaska relies on natu - ral gas for space heating in buildings and for much of the fuel needed for production of electricity. The new HEX gas drilling is also expected to add up to 100 jobs during development and five new permanent positions in production, strengthen -
ing Alaska’s skilled workforce and supporting across the state. “We’re proud to build a workforce rooted in our communities and fo - cused on long-term energy solutions for the state,” Hendrix said. Meanwhile, Hilcorp Energy’s new gas development in the Cook In - let region includes new work at the company’s Whiskey Gulch pad on the Kenai Peninsula near Anchor Point. Hilcorp outlined its plans in a Plan of Operations for its leases submitted to the state Division of Oil and Gas. Hil - corp started work at Whiskey Gulch
in 2019 with a series of stratigrahic test wells which have been com - pleted. Three gas exploration wells were also drilled from the pad be - tween 2021 and 2023. Reports from one of the wells provided to the state is public, showing a production rate in a test of 4.8 million cubic feet per day. Hilcorp is now planning to install gas production facilities at Whiskey Gulch, the company told the Division of Oil and Gas.
— Tim Bradner
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