BlueCrest Energy is suspending its development drilling program in the Cosmopolitan oil field off the southern Kenai Peninsula, Benjamin Johnson, BlueCrest president and CEO told Petroleum News today. The drilling suspension results from the state withholding $75 million to $100 million cashable tax credit payments owed to the company, Johnson said. The halt to the drilling will likely go into effect by Sept. 1.<p>
"We're going to finish drilling what we're doing right now. It's not an immediate shutdown," Johnson said, adding that oil production from the field will continue using wells that have been completed thus far.<p>
Johnson said that his company hopes to find an alternative source of funding for the continuation of the drilling, in which case the drilling will resume. The company operates its own drilling rig at Cosmopolitan and will park the rig at the field once the drilling stops. The cessation of drilling will, however, impact several hundred jobs, primarily on the Kenai Peninsula, Johnson said.<p>
BlueCrest invested more than $400 million of its own funds in the field development program but based its economics on cost-sharing offered by the state, Johnson said. The full development program at the field could involve the drilling of more than 20 new wells over a seven-year time frame, he said. BlueCrest currently has three wells in the field.<p>
- ALAN BAILEY<p>
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