As Hilcorp Plans to Drill in Arctic Waters, Violations Surface

"ANCHORAGE, Alaska — In the energy industry, Hilcorp has built a reputation for fast growth, big profits and making people rich. This 28-year-old Houston-based company has kept a low public profile while becoming one of the top five privately held oil and gas producers in the United States. Founder Jeffery Hildebrand has become a billionaire, rising up the ranks of the hundred richest Americans. Employees, who got six-figure bonuses for meeting output goals, rave online about their employer, which Fortune magazine has lauded as one of the 100 best companies to work for five years in a row.

In regulatory circles, however, and among environmentalists, Hilcorp has become known for different reasons. As the company has bought up older oil and gas fields from bigger companies, a business strategy known as "acquire and exploit," it has amassed a troubling safety and environmental track record in Alaska and several other states.

As soon as the company started working in Alaska in April 2012, it began to accumulate violations. By October 2015, the Alaska Oil and Gas Conservation Commission (AOGCC), the main industry regulator in the state, had documented 25 instances in which Hilcorp violated its regulations, prompting a reprimand that had little of the bureaucratic blandness typical of regulatory notices. "The disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska operations and virtually assured the occurrence of this violation," the chair of the commission wrote to the company in November 2015. "Hilcorp's conduct is inexcusable.""

Sabrina Shankman reports for InsideClimate News (co-published with the Dallas Morning News) August 10, 2017.