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Focus on gas drilling
Cosmopolitan: BlueCrest plans up to 3 Tyonek gas wells from land this year
Kristen Nelson Petroleum News
BlueCrest Alaska Operating, operator of the Kenai Peninsula Cosmopolitan unit, has submitted its proposed 12th plan of development for the unit to the Alaska Department of Natural Resources' Division of Oil and Gas.
BlueCrest currently produces oil, and some gas, from an onshore drill site with wells extending out under Cook Inlet. The division has been critical of recent PODs by the company as BlueCrest has not drilled the planned H10 well nor advanced development of the company's offshore natural gas accumulation.
Last year the division approved the 11th POD with numerous conditions and limited the duration of that proposed POD from calendar year 2025 to Jan. 1 through March 31, 2025.
Conditions included having committed private funding for the H10 well and the Tyonek gas development; providing evidence of binding commitments from private investors; a realistic schedule for the Tyonek gas development; monthly updates; and, if the H10 is not drilled the company must apply to contract its existing participating area to just the existing drainage area.
In the March 3 POD submittal, BlueCrest's John Martineck, the company's president and chief operating officer, said the proposed 12th POD covered April 1 through Dec. 31 of this year.
Current POD In its current 11th POD, covering Jan. 1 through March 31 of this year, Martineck told the division the company "has actively pursued the capital investment required to restart its onshore oil and gas drilling program and the offshore Tyonek Gas Drilling program."
He said that House Bill 50, passed in 2024 (which allows the Alaska Industrial Development and Export Authority to develop a reserves-based loan program), "and the expressed willingness by AIDEA to have the State of Alaska participate in funding of the Cosmopolitan assets have recently opened the door to new interest by investors."
BlueCrest submitted loan applications to AIDEA Dec. 31 to fund the H10 oil well and offshore Tyonek gas developments, Martineck said, and has met several times with division staff and the DNR commissioner's office since the first of the year on the status of the applications.
"BlueCrest has continued to evaluate development options for the Tyonek gas resources and recently submitted a third application with AIDEA to fund drilling Tyonek gas wells from an onshore location in 2025."
12th POD In the 12th POD for the unit, covering work through the end of the year, Martineck said the company's drilling programs "are contingent upon obtaining the necessary funds to move forward," and said BlueCrest is working with a large investment firm to secure necessary funds.
But, he said, it is also "essential" that the state Legislature approve funds for AIDEA.
HB 50 created the Cook Inlet reserve-based lending account in AIDEA, but funds for the account must be appropriated by the Legislature.
Martineck said "AIDEA's participation would be coinvested with our 3rd party funds to totally fund the projects."
He said BlueCrest plans to drill the H10 following completion of the onshore Tyonek gas wells.
A loan application was submitted to AIDEA Feb. 14 to fund up to three Tyonek gas wells from an existing onshore location in 2025, Martineck said, with the onshore extended-reach wells targeting the eastern portion of the deepest gas zone, the Tyonek A sand, "and would be drilled to accelerate new gas production for the Railbelt consumers."
Drilling the H10 trident fishbone well would follow drilling of the gas wells.
Martineck said BlueCrest would update the division on the progress of the wells in a June 30 letter.
Tyonek gas development BlueCrest is committed to meeting the production startup date of the end of the second quarter of 2027 for its Tyonek gas development and continues to work on permits for that project.
It plans to continue developing the Starichkof/Hemlock oil reservoirs "based on new information gained from each new well" beginning with the H10, Martineck said.
The company's longer-term plans include drilling the Lower Tyonek oil zones following completion of Starichkof and Hemlock oil reservoir wells.
Production from the field has been steadily declining.
Alaska Oil and Gas Conservation Commission production data for January, the most recent available, show production from the Hansen field at Cosmopolitan averaging 559 barrel per day, a drop of 16.42% from January 2024 when the field averaged 669 bpd. This January the field averaged 644 thousand cubic feet, mcf, per day of natural gas, down 31.3% from a January 2024 average of 1,301 mcf per day.
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