Providing coverage of Alaska and northern Canada's oil and gas industry
August 2019

Vol. 24, No.32 Week of August 11, 2019

BlueCrest submits Hansen oil pool rules application to commission

Kristen Nelson

Petroleum News

BlueCrest Alaska Operating has been producing oil from the Hansen pool at Cosmopolitan since 2017, from the H-16 well spud in November 2016 and H-14, drilled in 2017. The company has since drilled the H-04, H-12 and H-16A and the field is currently producing from three wells.

BlueCrest has never sought pool rules for the oil pool but has been operating under statewide Alaska Oil and Gas Conservation Commission rules. The commission said it received 25 spacing exception requests from BlueCrest for the Hansen H10 well and its fishbone lateral branches on June 7. If the current request were granted, it would result in 63 spacing exceptions having been issued to BlueCrest for the Hansen wells.

AOGCC scheduled a public hearing for Aug. 13 at 10 a.m. to establish pool rules for development and operation of the oil pool, and said BlueCrest should be prepared to present at that hearing “evidence on all relevant aspects of creation and operation of the oil pool, including, but not limited to the definition, boundaries and geology of the pool, reservoir and fluid properties, well spacing rules, any other requested rules, or any variances from AOGCC’s applicable regulations.”

Pool rules application

BlueCrest submitted an initial field and pool rules application Aug. 2 for the Hansen oil pool at the Cosmopolitan field.

The company said the rules would apply to the combined area of the Cosmopolitan unit, offshore of the Kenai Peninsula. “The Hansen oil pool is defined as the Hemlock and Starichkof oil and gas bearing formations within the Cosmopolitan Unit area,” BlueCrest said.

Within the Cosmopolitan field, the Hansen oil pool is the oil and gas bearing intervals common to and correlating with the interval between 6,538 feet measured depth and 7,312 feet MD in the Cosmopolitan State No. 1 well.

An important aspect of pool rules is oil well spacing, proposed as Rule 3, allowing for no well spacing restrictions within the oil pool, accommodating horizontal, multilateral and fishbone style wells, with the exception that no well will be completed within 500 feet of the exterior boundary of the unit unless ownership is the same on both sides of the unit boundary.

In its proposed rules BlueCrest notes that “fishbone multilateral wells will be completed barefoot with no liners or screens in the reservoir section.”


BlueCrest is the 100% working interest owner and sole operator of the Cosmopolitan field. The unit area contains 10 wells, four currently completed and online, one permitted but not drilled and the permit recently cancelled and five plugged and abandoned. The Cosmopolitan unit is 13,314 acres on four state oil and gas leases, with a participating area approved by the Alaska Department of Natural Resources Division of Oil and Gas.

BlueCrest said its multilateral fishbone well design has spacing between the individual fishbones, laterals, in a single well and laterals in adjacent wells of some 800 feet, which would require seven or more spacing exceptions per fishbone. To produce remaining reserves under current well spacing rules would be an unnecessary administrative burden on both BlueCrest and AOGCC, the company said.

BlueCrest said the proposed pool rules would eliminate intra-pool spacing rules and allow it “to target smaller, undrained portions of the pool that cannot be reached/contacted by wells conforming to current statewide spacing restrictions. Elimination of all spacing requirements inside the pool will help to maximize recovery from otherwise bypassed pay, while allowing for continued production from established development wells.”

“The Hemlock/Starichkof reservoir is compartmentalized and highly stratified,” the company said with very limited communication between wells.

BlueCrest said it expects ultimate recovery of from 10-15% of original oil in place, said recovery could increase if pressure maintenance or secondary recovery were initiated at a later date, “but at this time no such processes are deemed technically and economically feasible.”


The Cosmopolitan field was discovered by Pennzoil Oil Co. in 1967 at the Starichkof State No. 1; the well was drilled to a total depth of 12,112 feet and although it “discovered oil in the Lower Tyonek, it was drilled in an off-structure position on the east flank leaving approximately 2,500 acres untested in all zones,” BlueCrest said. Pennzoil then drilled the Starichkof State Unit No. 1 “on the north plunge of the Cosmopolitan anticline.

BlueCrest noted that after the discovery of Prudhoe Bay in early 1968, the majors redirected their efforts to the North Slope.

ARCO began investigating the prospect in the mid-1990s, an effort carried on by Phillips after it acquired ARCO’s interests in Alaska.

The Cosmopolitan unit was formed by Phillips in 2001 which completed the Hansen No. 1 well directionally from onshore. That well “reconfirmed the presence of producible oil in the previously discovered Starichkof zone, and it also confirmed productive sands in the Hemlock interval,” BlueCrest said.

ConocoPhillips drilled the Hansen 1A in 2003, “providing a deviated penetration of the Starichkof sands and a lateral penetration of the Hemlock zone.” In 2005 Pioneer Natural Resources joined with ConocoPhillips to obtain some 40 square miles of 3D seismic over the entire project area, and while that 3D “provided a clear view of the perimeter flanks of the anticlinal structural … the crestal view was obscured by a gas cloud rendering a conclusive image of the top of the structure impossible.”

Pioneer acquired ConocoPhillips’ working interest in Cosmopolitan in 2007, and drilled the Hansen No. 1AL1, another sidetrack of the original Hansen well and proposed a development plan for Cosmopolitan but in late 2010 decided not to pursue that plan and disbanded the unit in 2011, retaining leases held by wells.

Buccaneer Alaska and BlueCrest began negotiations with Pioneer in late 2010 and early 2011 to jointly acquire those leases, a sale which was completed in 2012. The companies drilled the 7,599-foot vertical Buccaneer Cosmopolitan State No. 1 in 2013 from offshore, discovering “numerous new oil and gas zones within the Upper and Lower Tyonek (above the previously known Starichkof and Hemlock zones).”

BlueCrest acquired Buccaneer’s interest in the field in January 2014 and began development drilling with the H-16, spud in late 2016, from the Hansen drilling pad. The H-14 was completed in late 2017.

BlueCrest began drilling its fishbone style extended-reach multilateral wells in 2018 with the H-12, and with positive results from that well the H-16 was reconfigured into an eight-leg multilateral, the H-16A.

The reservoir to the southwest was then delineated with the H-04 multilateral, begun in 2018.

The “multi-leg laterals out-performed horizontal or hydraulically fractured wells,” BlueCrest said.


BlueCrest said the structure at the Hansen oil pool is four and a half miles by two miles in size, with some 600 feet of vertical closure over an area of more than 6,000 acres at the Starichkof sand, a lower Tyonek sandstone just above the Hemlock conglomerate above the oil/water contact. Structural control is from 11 wellbores, three vertical and penetrating the entire geological section, five extended-reach single laterals drilled from the Hansen drilling and production pad and three multilateral fishbone extended reach wells drilled from the Hansen pad.

BlueCrest said it has “informally divided the Tyonek into an upper section that contains gas productive sandstones and a lower interval that is predominately oil prone,” the two zones separated by a “laterally correlative shale section.”

The lowest section of the Lower Tyonek, from 6,742 feet to 7,104 feet MD, has been referred to as the Starichkof sand and is the oil discovery found by Pennzoil in its Starichkof State No. 1 in 1967.


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