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Integrity • Urgency • Ownership • Alignment • Innovation

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.

aubrey-allen
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Integrity • Urgency • Ownership • Alignment • Innovation

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  1. Integrity • Urgency • Ownership • Alignment • Innovation

  2. We are often asked… Why buy into Cook Inlet?

  3. COOK INLET: The positives Legacy oil and gas basin with giant fields Access to land Rule of law Stable fiscal policy

  4. The History of Cook Inlet GAS First gas encountered: 1950’s First and largest commercial discovery: 1959 Kenai Gas Field First gas production: 1961 Gas production/sales peak: 2001 212 BCF (580 mmscfd) Current gas production/sales: 2013 90 BCF (246.5 mmscfd) 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

  5. HILCORP: Making Headway

  6. ONSHORE: New drilling rigs Ninilchik, SD8 Swanson River Field

  7. 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

  8. Increased field activity

  9. Oil Production

  10. Cook Inlet Oil Production Thousands of Barrels per Day

  11. 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

  12. Sell more gas

  13. 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

  14. Invest for the future 2013 Investment $338.7MM

  15. Community minded employees Nearly 500 grants to Alaskan 501(c)3 Organizations

  16. 2012-2013 HAK Financial Impact $8MM Gov’t Payments $80MM Royalty to Individuals Payroll $96MM Goods & Services $814MM Total Impact $998,000,000

  17. Cook Inlet Outlook: Half-full or Half-Empty? • 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 $80MM $96MM $814MM

  18. Why NOT Cook Inlet?

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