BlueCrest’s 7th POD

Maintain production; trident fishbone well on hold until prices firm up

Steve Sutherlin

Petroleum News

BlueCrest Alaska Operating LLC will implement well work in order to maintain production under its seventh plan of development for the Cosmopolitan unit, in effect from Jan. 1, 2021, through Dec. 31, 2021.

In a Sept. 25 letter to the Alaska Department of Natural Resources Division of Oil and Gas, BlueCrest said plans in its sixth POD to drill at least one trident fishbone well in 2020, which were delayed due to COVID-19 oil market disruptions, will remain on hold for 2021 “until the current market environment improves.”

Each trident fishbone well, built on the company’s success with its single fishbone wells, will “provide the same amount of reservoir contact as 21-27 individual wells.” J. Benjamin Johnson, BlueCrest Energy CEO and president told Petroleum News in 2019.

A complete well plan stands ready for the company’s proposed H10 trident well, Johnson said in a Sept. 29 interview.

“It’s on indefinite hold. We’re ready to go but we’re waiting to have some confidence in oil prices,” he said. “It’s a moving target; the oil prices are down but costs have also come down.”

The company said the pause in drilling has allowed it to advance the evaluation of developing offshore gas reserves in the unit, offshore the south Kenai Peninsula town of Ninilchik in Cook Inlet.

“We have a large gas resource, proven; it’s been tested, but it’s expensive to develop,” Johnson said. “We’re just waiting to see what the market looks like.”

Johnson said the gas is coalbed methane that has migrated onto the sands of the Tyonek formation, which lies above all the oil zones in the unit.

“Cook Inlet needs this gas, and especially if any of the mines come online or if there’s any new demand for the gas,” he said.

In the meantime, the company has made strides to better handle and commercialize associated gas produced from its existing and future oil wells.

BlueCrest said it has completed the commissioning of a new mechanical refrigeration unit capable of processing up to 35 million feet per day of natural gas, adding that the MRU will reduce the hydrocarbon dew point in the natural gas stream to meet strict pipeline quality specifications, while also allowing the company to process a much higher level of gas production.

“The gas that is with the oil contains natural gas liquids, and the MRU is basically a gas plant and the gas plant removes the natural gas liquids - the propane, butane, and that type of material,” Johnson said. “In the Lower 48, the gas pipelines want the NGLs in the gas; in Alaska they don’t want it.”

“We’re not sure exactly what its origin is, but it’s intermixed within the oil zones, and so, one way or another it has absorbed natural gas liquids,” he said. “There are two possibilities: one is that it is gas that has evolved off of the oil - most likely it’s probably coalbed methane that has migrated and been trapped inside one of the oil zones.”

“Some of our oil wells initially will produce a lot of gas,” Johnson said. “We have one well that - we were never able to open it up because we didn’t have a MRU that could handle its gas rate - it probably would have made 17 million a day.”

The oil well was producing gas from a gas zone inside the oil reservoir, he said, adding, “it’s mostly been depleted; we do expect we will have a few more of those as we drill more fishbone oil wells.”

The MRU is expected to handle as much gas as BlueCrest will ever produce from the oil zones, Johnson said.

If BlueCrest does develop its offshore gas, that gas is extremely dry, he said.

“There really won’t be any natural gas liquids to worry about,” Johnson said, adding that the MRU still may aid in cleaning up the gas from the offshore in some way in the future.

Maintaining production rates

“The Hansen 1AL1 is an old well that did not have artificial lift installed in the well, it flowed naturally for years; it finally didn’t have enough pressure to lift itself without artificial lift,” Johnson said. “It actually is a good producer, if we could work it over or do something else to allow it to flow.”

Johnson said the well is flowing today at several hundred barrels a day but the company is not sure how long that will last.

The company is studying the well to determine how to enhance its production, and whether the expense would be justified.

As for the hot oil treatments, Johnson expects them to be routine for the life of the field.

“Just like Swanson River field, and some of the other oil fields in the Cook Inlet, the oil has some paraffins in it; the paraffin will form - basically - a wax, and plug up the well,” he said. “We pump hot oil in that heats up the wax and dissolves and cleans it out.”

“We do that about every three weeks now; that’s an ongoing thing; we’ll probably do that forever,” he said. “Swanson River started in 1957, they’re still using hot oil treatment there.”