Hex Cook Inlet says royalty modification, new financing and drilling sidetrack raised winter output

Hex Cook Inlet told the Alaska Senate Resources Committee on Jan. 22 that a royalty-modification process, new financing and drilling activity in 2024 increased output from the Kitchen Lights Unit and helped avoid a potential mid‑year shutdown.

Chief Commercial Officer Mark Slaughter told the panel that Hex Cook Inlet — the owner/operator of the Fury-operated Kitchen Lights Unit — applied for royalty relief from the Department of Natural Resources in 2023, completed a full application in September 2024 and is still awaiting the department’s final best‑interest decision. Slaughter said the company had ordered long‑lead equipment and moved a jackup rig onto its platform last fall before the royalty decision was final.

The company said the royalty request sought the statutory minimum of 3 percent (the department can reduce private royalties to that level under the statute cited in the application) for a multi‑year term that would adjust as prices increase. Slaughter summarized DNR’s preliminary best‑interest finding as one that, if implemented, would extend field life by about 10.5 years, produce an estimated additional 62 billion cubic feet and yield roughly $37 million in additional…