Vol. 27, No.41 Week of October 09, 2022
Providing coverage of Alaska and northern Canada's oil and gas industry

BlueCrest plans drilling

Click here to go to the full PDF version of this issue, with any maps, photos or other artwork that appears in some of the articles.

Company has the largest known underdeveloped structure in Cook Inlet

Kay Cashman

Petroleum News

Pending receipt of investment funding, BlueCrest Alaska Operating plans to restart its oil and gas drilling program in 2023 after a three-year gap largely due to the pandemic and unstable oil prices. The first well the company will drill is the H10 Trident Fishbone, John M. Martineck, BlueCrest president and chief operating officer, told Alaska’s Division on Oil and Gas Sept. 27 in the 9th plan of development for the Cosmopolitan unit, which runs from Jan. 1, 2023, to Dec. 31, 2023.

“This well has already been designed and would be ready to spud within several months of receipt of new funding,” Martineck said.

Depending on oil prices and project funding, the plan is to continue to drill more oil and gas wells, Martineck told Petroleum News Oct. 5.

But funding is a major challenge for Cook Inlet basin oil and gas companies.

“The challenge to get financing is largely because of the way the State handled the tax credits,” Martineck told PN.

Several Cook Inlet producers went bankrupt in the last few years as a result of the previous gubernatorial administration’s delay to pay exploration credits, he said.

“Companies, including BlueCrest, spent millions on exploration but then could not collect from the State. … Some sold tax credits at a drastically reduced price to other companies to get funds to stay afloat.”

Worse, he said, “the State also cancelled the tax credit program we were counting on from the start.”

But, Martineck told PN, agencies such as the Alaska Oil and Gas Conservation Commission have been good to work with.

The company has to get 24 well permits to drill a trident fishbone - one main wellbore from the surface that will then split into three subsurface “fishbones” with eight wells each.

“AOGCC has been really responsive and good to work with. They’re keen on new technology,” he said.

The Hansen field in the Cosmopolitan unit is three miles offshore the southern Kenai Peninsula and five miles north of Anchor Point.

Accessed from an onshore pad using directional drilling, the accumulation’s production is “primarily oil but there is an associated gas component to it,” Martineck told PN. BlueCrest sells its gas to local utilities for use in the local market.

Largest CI structure

Southcentral Alaska utilities are going to start seeing gas shortages in the next few years, he said.

“BlueCrest has the largest known underdeveloped structure in the inlet. … We have a large Tyonek gas reservoir that is untapped. We need to start working on it now to have gas in two or three years,” Martineck told PN, adding that development would involve putting in a new platform and pipeline.

He said BlueCrest will continue to evaluate and advance their offshore Tyonek Gas Development, but they can’t make it a reality without a major infusion of funds.

BlueCrest also plans to continue to develop the Starichkof/Hemlock oil reservoirs based on new information gained from each new well, beginning with the H10 Trident Fishbone.

During the eighth POD BlueCrest planned to maintain production, conduct hot oil treatments to maintain rates, and continue planning for potential gas development. These operations were completed, Martineck told the division.

Additionally, BlueCrest upgraded and overhauled several major pieces of processing equipment in the onshore Hansen Production Facility.

“In 2022, we overhauled our two High Pressure gas compressors. These compressors are the lifeline of the facility.”

They’re not only used for compressing natural gas for sale but are also used to gas lift all BlueCrest’s wells and provide fuel for all its plant operations.

Another large undertaking in 2022 was making “some important upgrades to our Mechanical Refrigeration Unit. This unit is used to remove unwanted liquids and impurities in our natural gas to bring the natural gas to pipeline sales specification,” Martineck said.

“BlueCrest also performed Hot Oil Treatments on our wells every 3 to 4 weeks. This helped with maintaining production levels in the facility.”

Martineck said BlueCrest will continue to make adjustments to its wells to maximize production levels and to extend their lives.

Print this story | Email it to an associate.

Petroleum News - Phone: 1-907 522-9469
[email protected] --- ---

This story has 881 words, takes 2 min. to speedread and it is 2118 pixels high.