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Vol. 22, No. 41 Week of October 08, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

1-well Cosmo program

BlueCrest H-16 lateral would target Starichkof, precede Hemlock evaluation

Eric Lidji

For Petroleum News

BlueCrest Alaska Operating LLC plans to drill at least one development well at the Cosmopolitan unit over the coming year, potentially testing the Starichkof Zone.

The local subsidiary of the Texas-based independent is currently leaning toward drilling the H-16 Upper Lateral into the Starichkof Zone in 2018, according to a unit plan of development submitted to the state Division of Oil and Gas in late September.

The company is also planning to use the coming year to evaluate the results of its first year of drilling activities at the offshore Cook Inlet unit to determine its future plans.

BlueCrest initially planned to conduct a five-well program starting in early 2017: the H-16 well, the H-14 well and H-14L lateral, and the H-12 well and H-12L lateral. The company ultimately completed two wells and three sidetracks at Cosmopolitan this year.

The company began drilling the H-16 well in late November 2016 and completed operations in March 2017. The 22,810-foot well reached a target in the Hemlock formation at 7,089 feet. The well is currently producing 330 barrels per day.

The company began the H-14 Lower Lateral in late March 2017 and finished drilling the 23,415-foot well into the Hemlock formation in mid-May 2017, according to the plan.

A subsequent technical problem complicated operations, though.

“BlueCrest was running the liner into the H14 Lower Lateral when the Baker Hughes Packer/Liner Hanger Assembly failed and prematurely & permanently set the liner in the well (-4,000 ft. short of TD (total depth)),” the company wrote in its plan. “BlueCrest completed a milling/fishing job to recover the liner that was left in the cased hole.”

BlueCrest started three separate sidetrack operations on the H-14 Lower Lateral before completing the well at 22,300 feet on Sept. 25, 2017, according to the company. As of the date of the report, two days later, the company was preparing to run the liner on the well.

Upcoming plans

Over the coming year, BlueCrest plans to use the results of those two wells to “determine our path forward,” and to progress permitting and engineering, according to the plan.

The company said it has received a permit from the Alaska Oil and Gas Conservation Commission to drill the H-12 development well but needs to revise the permit to accommodate a different completion package planned for the operation. The AOGCC has yet to include the H-12 drilling permit on its weekly report of approved drilling permits.

In June, the AOGCC issued a spacing exemption, allowing BlueCrest to drill the H-12 well within the same governmental section as the H-14 and H-16 wells and their laterals.

BlueCrest intends to request an AOGCC drilling permit for the H-16 Upper Lateral and H16 Exploratory Lateral either later this year or early next year, according to the plan.

As currently envisioned, the H-16 Upper Lateral would target the Starichkof. Pennzoil discovered Cosmopolitan in 1967 with the Starichkof State No. 1 well. Phillips confirmed the discovery and also discovered Hemlock oil with the Hansen No. 1 well in 2001.

The state Division of Oil and Gas recently approved the formation of a participating area at the Cosmopolitan unit that includes both the Starichkof sands and the Hemlock.

Earlier this year, BlueCrest said it was planning to suspend development drilling at the Cosmopolitan unit during the final months of this year, after completing work at the H-14 well, as a result of $75 million to $100 million in withheld tax credits from the state. The company said it would resume drilling activities once it had located alternative funding.

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