Providing coverage of Alaska and northern Canada's oil and gas industry
September 2017

Vol. 22, No. 37 Week of September 10, 2017

Cosmo participating area approved

Alaska’s Division of Oil and Gas has approved the formation of a participating area involving a combination of the Starichkof Sand and the Hemlock formation in the Cosmopolitan field offshore the southern Kenai Peninsula. BlueCrest Alaska Operating LLC operates the field, which produces oil at an onshore drill pad near Anchor Point on the Kenai Peninsula. The offshore field reservoir is accessed by means of extended reach wells from the onshore site.

A participating area defines the extent of land capable of producing hydrocarbons within an oil and gas unit.

Faulted anticline

The division’s participating area approval document says that the Cosmopolitan field lies within a faulted anticline first identified the in 1960s from 2-D seismic data. The subsurface structure was then better delineated from 3-D seismic shot in 2005 by Pioneer Natural Resources and ConocoPhillips. The doubly plunging, asymmetric structure, 4.5 miles by 2 miles in size, is bounded along its west flank by a high angle reverse fault. Other faults have displaced the northern and southern portions of the structure, leaving about 600 feet of vertical closure over 6,000 acres of the Starichkof sand, a rock unit within the lower part of the Tertiary-age Tyonek formation, the division’s approval document says.

Below the Tyonek lies the Hemlock formation, while about 1,000 feet of Beluga formation sandstones, conglomerates, shales, coal and siltstones sits above the Tyonek.

Oil discovery

The Starichkof State No. 1 well, drilled by Pennzoil in 1967, found oil in the Starichkof Sand. In 2001 the Hansen No. 1 well, drilled by Phillips, confirmed that earlier discovery and also found oil in the Hemlock - the well flowed 380 barrels of oil per day from the Hemlock and 125 barrels per day from the Starichkof, the division document says.

In 2003 ConocoPhillips sidetracked the Hansen 1A well from the Hansen 1 well bore, subsequently flow testing oil at an average rate of 750 barrels per day from the Hemlock and Starichkof. In 2007 Pioneer, by then operator of the Cosmopolitan leases, drilled another sidetrack well, this time from the Hansen 1A sidetrack. That sidetrack tested oil flow at a rate of 285 barrels per day and gas flow at 1.15 million cubic feet per day from the Starichkof.

In 2013 Buccaneer Energy Ltd., which by then had taken over as operator at Cosmopolitan leases, drilled the offshore Cosmopolitan State No. 1 well through the crest of the structure delineated from the 2005 3-D seismic data. That well found new, potentially productive zones in the Hemlock and the Tyonek. The well also tested gas zones in the Tyonek above the Starichkof.

Production started 2016

BlueCrest ultimately bought out Buccaneer’s interests in the field and in April 2016 started oil production from the field from the converted Hansen 1AL 1 well. The company has since completed the drilling of the Hansen 16 development well, but has yet to announce the results of production testing of this well. In March 2017 the company started drilling the Hansen 14 well, including a long horizontal section through the field’s oil reservoir. However, in early August the company announced that it would not embark on further drilling, because the state had suspended some cashable tax credit payments that the company had factored into its field development economics.

The division said the newly approved participating area extends from the base of Hemlock to the top of the Starichkof Sand, across the drainage area of existing and planned wells. The participating area will enable the most efficient recovery of oil and gas from the field; will prevent the waste of resources; and will provide for the equitable division of costs and hydrocarbon production associated with the field, the approval document says.

BlueCrest has no current plans to develop the gas that has been found in the shallower sections of the Tyonek. Development of this shallow gas would require offshore drilling and the installation of offshore production platforms, a presumably challenging undertaking given the relatively small scale of the local Cook Inlet gas market and the low global price for exported LNG.


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