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Home My WebLink AboutCO 749CONSERVATION ORDER 749 Docket Number: CO -18-017 1. July 12, 2018 B1ueCrest application for spacing exception 2. July 23, 2018 Notice of hearing, affidavit of publication, email distribution, mailings STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71' Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF BlueCrest Alaska Operating LLC to drill, complete, test, and produce the Hansen H -16A development oil well within the same governmental quarter section as, and within 1,000 feet of, wells and well branches that are, or may be capable of, producing from the same pool. IT APPEARING THAT: Docket Number: CO -18-017 Conservation Order 749 Cosmopolitan Unit Hansen Undefined Oil Pool Hansen H -16A Oil Development Well Kenai Peninsula Borough, Alaska September 13, 2018 1. By a letter received July 12, 2018, BlueCrest Alaska Operating LLC (BlueCrest) requested an exception to the statewide spacing requirements of 20 AAC 25.055 to drill, complete, test, and produce the Hansen H -16A development oil well within the same governmental quarter section as, and within 1,000 feet of, wells and well branches that are, or may be capable of, producing from the same pool. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for September 6, 2018. On July 23, 2018, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On July 24, 2018, the AOGCC published the notice in the ANCHORAGE DAILY NEWS. 3. BlueCrest sent by certified mail notice of the application to all owners, landowners, and operators of all properties within 1,000 feet of the proposed Hansen H- 16A development well—i.e., the State of Alaska and the Bureau of Ocean Energy Management—and provided the notice, addresses to which the notices were delivered, and Certified Mail receipts. 4. No comments or request for hearing were received regarding B1ueCrest's application. 5. The tentatively scheduled public hearing was vacated following the 30 -day public comment period. 6. B1ueCrest's application provided sufficient information upon which to make an informed decision. FINDINGS: 1. BlueCrest is the operator and sole working interest owner of the Cosmopolitan Unit, located within the Cook Inlet, Kenai Peninsula Borough, Alaska. 2. Hansen H -16A will be a horizontal, development oil well drilled directionally to the northwest from an onshore surface location at 2,408 feet from the south line (FSL) and 1,509 feet from the east line (FEL) of Section 2, Township 4 South, Range 15 West, Seward Meridian (S.M.). The top of the Hansen Undefined producing interval location will lie offshore about 2,572 feet FSL and 1,182 feet FEL of Section 33, Township 3 South (T3S), Range 15 West (R15W), CO 749 September 13, 2018 Page 2 of 3 S.M. The bottom -hole location will lie offshore about 1,950 feet FSL and 2,933 feet FEL of Section 29, T3S, R15W, S.M. 3. The surface location for Hansen H -16A lies on private property. The top -of -productive interval and bottom -hole locations will lie within State of Alaska leases ADL 18790 and ADL 384403, respectively. 4. Hansen H -16A will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H -16A will be located within the governmental quarter sections as, or within 1,000 feet of, the following development oil wells and well branches that are, or may be capable of, producing from the same oil pool: Hansen IA, Hansen 1A -L1, Hansen H-12, Hansen H-12- LO1 through H-12-1,06, Hansen H-14, and Hansen H -14L1. 6. The well path and bottom -hole location for Hansen H -16A were chosen—based on reservoir mapping and modeling results—to ensure greater ultimate recovery by maximizing the amount of wellbore open to the reservoirs and extracting oil that cannot be efficiently produced by existing wells and well branches. CONCLUSIONS: 1. An exception to the well spacing provisions of 20 AAC 25.055(a)(3) is necessary to allow the drilling, completion, testing, and regular production of the Hansen H -16A development oil well at a location that will maximize resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055(a)(3) for the Hansen H -16A well will not result in waste or jeopardize correlative rights of adjoining or nearby owners. NOW THEREFORE IT IS ORDERED: The AOGCC grants BlueCrest's July 12, 2018, application for an exception to the well spacing provisions of 20 AAC 25.055(a)(3) to allow drilling, completion, testing, and regular production of the Hansen H -16A development oil well within the Hansen Undefined Oil Pool. BlueCrest may proceed as long as it complies with all applicable laws, and all other legal requirements DONE at Anchorage, Alaska and dated September 13, 2018. 1 (CIJ(�t/V?M A&� .Daniel T. Seamount, Jr. ( , Kathy P. Foerster WCommissioner SW Commissioner CO 749 September 13, 2018 Page 3 of 3 As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be emmeous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to mn is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period mns until 5:00 p.m. on the next day STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71 Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF BlueCrest Alaska Operating LLC to drill, complete, test, and produce the Hansen H -16A development oil well within the same governmental quarter section as, and within 1,000 feet of, wells and well branches that are, or may be capable of, producing from the same pool. IT APPEARING THAT: Docket Number: CO -18-017 Conservation Order 749 Cosmopolitan Unit Hansen Undefined Oil Pool Hansen H -16A Oil Development Well Kenai Peninsula Borough, Alaska September 13, 2018 By a letter received July 12, 2018, BlueCrest Alaska Operating LLC (BlueCrest) requested an exception to the statewide spacing requirements of 20 AAC 25.055 to drill, complete, test, and produce the Hansen H -16A development oil well within the same governmental quarter section as, and within 1,000 feet of, wells and well branches that are, or may be capable of, producing from the same pool. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for September 6, 2018. On July 23, 2018, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On July 24, 2018, the AOGCC published the notice in the ANCHORAGE DAILY NEWS. 3. BlueCrest sent by certified mail notice of the application to all owners, landowners, and operators of all properties within 1,000 feet of the proposed Hansen H -16A development well—i.e., the State of Alaska and the Bureau of Ocean Energy Management—and provided the notice, addresses to which the notices were delivered, and Certified Mail receipts. 4. No comments or request for hearing were received regarding BlueCrest's application. 5. The tentatively scheduled public hearing was vacated following the 30 -day public comment period. 6. B1ueCrest's application provided sufficient information upon which to make an informed decision. FINDINGS: 1. BlueCrest is the operator and sole working interest owner of the Cosmopolitan Unit, located within the Cook Inlet, Kenai Peninsula Borough, Alaska. 2. Hansen H -16A will be a horizontal, development oil well drilled directionally to the northwest from an onshore surface location at 2,408 feet from the south line (FSL) and 1,509 feet from the east line (FEL) of Section 2, Township 4 South, Range 15 West, Seward Meridian (S.M.). The top of the Hansen Undefined producing interval location will lie offshore about 2,572 feet FSL and 1,182 feet FEL of Section 33, Township 3 South (T3S), Range 15 West (R15W), CO 749 September 13, 2018 Page 2 of 3 S.M. The bottom -hole location will lie offshore about 1,950 feet FSL and 2,933 feet FEL of Section 29, T3S, R15W, S.M. 3. The surface location for Hansen H -16A lies on private property. The top -of -productive interval and bottom -hole locations will lie within State of Alaska leases ADL 18790 and ADL 384403, respectively. 4. Hansen H -16A will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H -16A will be located within the governmental quarter sections as, or within 1,000 feet of, the following development oil wells and well branches that are, or may be capable of, producing from the same oil pool: Hansen IA, Hansen IA -Ll, Hansen H-12, Hansen H -12- L01 through H -12-L06, Hansen H-14, and Hansen H -14L1. 6. The well path and bottom -hole location for Hansen H -16A were chosen—based on reservoir mapping and modeling results—to ensure greater ultimate recovery by maximizing the amount of wellbore open to the reservoirs and extracting oil that cannot be efficiently produced by existing wells and well branches. CONCLUSIONS: 1. An exception to the well spacing provisions of 20 AAC 25.055(a)(3) is necessary to allow the drilling, completion, testing, and regular production of the Hansen H -16A development oil well at a location that will maximize resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055(a)(3) for the Hansen H -16A well will not result in waste or jeopardize correlative rights of adjoining or nearby owners. NOW THEREFORE IT IS ORDERED: The AOGCC grants BlueCrest's July 12, 2018, application for an exception to the well spacing provisions of 20 AAC 25.055(a)(3) to allow drilling, completion, testing, and regular production of the Hansen H -16A development oil well within the Hansen Undefined Oil Pool. B1ueCrest may proceed as long as it complies with all applicable laws, and all other legal requirements DONE at Anchorage, Alaska and dated September 13, 2018. //signature on file// //signature on file// Daniel T. Seamount, Jr. Cathy P. Foerster Commissioner Commissioner CO 749 September 13, 2018 Page 3 of 3 As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration most set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which can the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-017 Docket Number: CO -18-018 Docket Number: CO -18-019 Docket Number: CO -18-020 Docket Number: CO -18-021 Docket Number: CO -18-022 Docket Number: CO -18-023 Docket Number: CO -18-024 The applications of B1ueCrest Energy (B1ueCrest) for an exception to the spacing requirements of 20 AAC 25.055 for the drilling of the Hansen HI 6A well and the Hansen H-16A-LO1, Hansen H -16A -L02, Hansen H -16A -L03, Hansen H -1 6A -L04, Hansen H -16A -L05, Hansen H- 16A -L06, and Hansen H -16A -L07 well branches. BlueCrest, by letter dated July 12, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirement of 20 AAC 25.055 because the proposed well and well branches will be drilled within the same governmental quarter sections as, and within 1,000' of, wells Hansen H-12 and Hanson H-14 and well branch Hansen 1 AL 1, which are, or maybe capable of, producing from the same pool. The AOGCC has tentatively scheduled a public hearing on this application for September 6, 2018, at 10:00 a.m. at 333 West 7`h Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on August 9, 2018. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after August 10, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7'h Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on August 27, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the September 6, 2018 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than August 30, 2018. Hollis S. French Chair STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OFPUBLICATION WITH ATTACHED COPY OF"WRTISMENT. ADVERTISING ORDER NUMBER 1111 AO-19-001 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O.AGENCY 7/23/2018 PHONE: (907) 279-1433 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Anchorage Daily News, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF. ADVERTISEMENT: I LEGAL DISPLAY ( CLASSIFIED OTHER (Specify belo) DESCRIPTION PRICE Docket NO's CO-18-017 through CO-18-024 Initials of who prepared AO: Alaska Non -Taxable 92-600185 �eli6ldiT:BNAI'eESHOWINGADV.ERTISING. '.DRDERNO„ CERTIFIEDAFFIDAYH[W.:. -:PUBLIGT..IDN WITHIA7P6CHHI COPYOF: ADi'EPTISMEN7:I0a AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Pae 1 of 1 Total of All Pages $ REF Ty Number Amount Date Comments I PVN VCO21795 2 Ao AO-19-001 3 4 FIN AMOUNT SY Act Template PGM LGR Object FY DIST LIQ 1 19 A14100 3046 19 2 3 4 A h�Tit] : 17 Purchasing Authority's Signature Telephone Number 'recei,ngagency name must I invoices and documents relating to this purchase. e is registered for tax free transactions under Chapter 32. IRS code Registration number 82-73-0006 K. Items are for the exclusive use afthe state and not for V21 DISTRIBUTION DLvsiogFseal/Orlgil;al,Ad ,:;Copies: t;tillsher(faxed),D1vlsterli? Al,Recelving Form: 02-901 Revised: 7/23/2018 ANCHORAGE DARN NEAAWCEIVED JUL 2 6 2018 AFFIDAVIT OF PUBLICATION AOGCC Account#: 270227 Order# 0001425117 Product ANC -Anchorage Daily News ST OF AK/AK OIL AND GAS Cost $249.02 Placement 0300 CONSERVATION COMMISSION Position 0301 333 WEST 7TH AVE STE 100 ntirunonnF nu ootnlasgo STATE OF ALASKA THIRD JUDICIAL DISTRICT _ Notice of Public Hearing Joleesa Stepetin STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION being first duly sworn on oath deposes and says that he/she is a representative of the Anchorage fie. Docket Number' CO -18-017 O 18-018 Daily News, a daily newspaper. That said Docket Number: CO -18-o19 Docket Number: CO -18-020 newspaper has been approved by the Third Docket Number: CO -18-021 . Judicial Court, Anchorage, Alaska, and it now Docket Number: CO-18-022Docket Number: CO -18-023 and has been published in the English language Docket Number: CO -18-o24 continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time The applications of BlueCrest Energy spacing requirements of 20 AAC 251055ef ethefdrill anof the Hansen was printed in an office maintained at the 16A -L 3, Hanse6A well and n H-16he A 1-04 Hansen H -16A L05, iHanssen H16A 1-06, aforesaid place of publication of said newspaper. and Hansen H -16A -L07 well branches. That the annexed is a copy of an advertisement BlueCrest,, by letter dated July 12, 2018, requests the Alaska Oil and Gas as it was ublished in regular issues and not in P 9 Conservation Commission (AOGCQ issue an order for an exception to the spacing requirement of 20 AAC 25.055 because the supplemental form) of said newspaper on proposed well and well branches will be drilled within the sameggovernmental quarter sections as, and within 1,000' of; wells Hansen H-12 and Hanson H-14 and well branch Hansen 1AL1, which are, or maybe capable of, Producing from the same pool. July 24, 2018 The AOGCC has tentativelyy scheduled a public hearing on this application for September 6, 2018, at 10:00 a,m. and that such newspaper was regularly at 333 West 7th Avenue Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written distributed to its subscribers during all of said raquest must be filed with the AOGCC no later than 4:30 p.m. on August 9, 2018. period. That the full amount of the fee charged If a request for a hearing is not timely filed, the AOGCC may consider an the the Without9-221 for the foregoing publication is not in excess of 907er hearing. akernRugust 10, 20the S. /{OGCC will the rate charged private individuals. In addition, written comments regardig this application may be submitted to the AOGCC at 333 West 701 Avenue, Anchorage, I Alaska 99501. Comments must be received no later than 4:30 on August Signed no l2018,p.m. received ter than the conclusion of the September 6 2018 Joie a Steoetin hearing If, because of a disability_ inerial Subscribed and sworn to before me this 24th day ofJuly, 2018 isMI W 3 m'&) n Notary PuIc i and for The State of laska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES 31/ 30 (9 Published: July 24, 2018 no //signature on file// Hollis S. French Chair, Commissioner Notary Public L. THOMPSON State of Alaska LwBRITNEY ommission Expires Feb 23, 2019 1 July 12, 2018 Alaska Oil and Gas Conservation Commission 333 West 7`h Avenue, Suite 100 Anchorage, Alaska 99501 RE: Application for Spacing Exception for H16A Onshore Horizontal Producer Dear Commissioners, Cosmopolitan Project BlueCrest Energy - H16A Spacing Exception_AOGCC 3301 C Street, Suite 202, Anchorage, AK 99503 Larry Burgess Phone: (907)754-9552 Email: lburgess@bluecrestenergy.com JUL 12 2G18 A0ISCC3 BlueCrest Alaska Operating LLC hereby applies for a spacing exception for the horizontal production well H16A. H16A will lie within the same governmental quarter sections as, Hansen 1AL3, H14 and H12 development oil wells that are open to the Cosmopolitan Undefined Oil Pool and are, or expecting to be, actively producing oil. Accordingly, an exception to statewide spacing requirements is requested. BlueCrest Energy Is the only effected working interest owner and operator within the leasehold contacting the Cosmopolitan Undefined Oil Pool. The Bureau of Ocean Energy Management (BOEM) and Alaska Department of Natural Resources Division of Oil and Gas (ADNR DOG) have been notified of BlueCrest Energy's intent to submit this application for exception. The necessary documentation confirming notice is included in the attached. Reservoir modeling Indicates that the optimum spacing for the laterals is 800'. Because of that spacing, the laterals are in conflict with each other as well as neighboring wells. Also, due to the 3030 azimuth we are drilling for hole stability, there are multiple instances where two or more of the laterals will be within the same M section. For these reasons, in lieu of pool rules that would allow for this unique and field specific spacing, BlueCrest Energy is requesting a spacing exception. Please find attached for the review of the Commission the information required by 20 ACC 25.055 for this well bore. If you have any questions or require further Information, please do not hesitate to contact Andrew Buchanan at 907-754- 9563. Sincerely, Larry ilIrgess Alaska Manager BlueCrest Energy - H16A Spacing Exceptlon_AOGCC ^lueC est Energy BlueCrest Alaska Operating LLC 3301 CStreet, Suite 202 Anchorage, AK 99503 Tel: (907) 754-9550 Fax. (907) 677-0204 Transmittal RECEIVED JUL 12 2018 Included Documents: • Application for Spacing Exception for H16A Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. • Application for Spacing Exception for H16A-1_01 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. • Application for Spacing Exception for H16A-1_02 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. • Application for Spacing Exception for H16A —1_03 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. • Application for Spacing Exception for H16A-1_04 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. Cont. from page 1: BlueCrest Alaska Operating LLC • Application for Spacing Exception for H16A —1_05 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. Application for Spacing Exception for H16A-1_06 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. Application for Spacing Exception for H16A-1_07 Onshore Horizontal Producer, with proof of mailing to Alaska Department of Natural Resources & Bureau of Ocean Energy Management—Alaska Region. Best Regards Tom McKay Jue Energp Application for Spacing Exception Horizontal Producer H1 6A Table of Contents Cosmopolitan Project H1 6A Application for Spacing Exception 20 AAC 25.055. Drilling units and well spacing...........................................................2 1. Requirements of 20 AAC 25.055 (a) ............................................. ........2 ................... 2. Requirements of 20 AAC 25.055 (b) ................................................. 3. Requirements of 20 AAC 25.055 (c)........................................................................2 4. Requirements of 20 AAC 25.055(d)........................................................................3 5. Attachments..............................................................................................................3 Attachment 1 Spacing Exception Platt.........................................................................................................3 Attachment2 Affidavit ............................................................................................................................... 3 Attachment 3 Notification Information........................................................................................................3 1IPage H16A Application for Spacing Exception 1�Sits r8Y 20 AAC 25.055. Drilling units and well spacing 1. Requirements of 20 AAC 25.055 (a) Cosmopolitan Project H16A Application for Spacing Exception The commission will, in its discretion, establish drilling units to govern well spacing and prescribe a spacing pattern by pool rules adopted in accordance with 20 AAC 25.520. In the absence of on order by the commission establishing drilling units or prescribing a spacing pottern for o pool, the following statewide spacing reoulremerrts opply: (1) for a well drilling for oil, a wellbore maybe open to test or regular production within 500 feet of a property line only if the owner is the some and the landowner is the some on both sides of the line; Not Applicable- Well is not within 500' of the federal lease line (2) fora well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the some and the landowner is the same on both sides of the line; Not Applicable - Wellbore is drilling for oil. (3) if oil has been discovered, the drilling unit for the pool is a governmental quarter section; not more than one well may be drilled to and completed in that pool on any governmental quarter section; a well may not be drilled or completed closer than 1,000 feet to any well drilling to or capable of producing from the some Pool; Please see Attachment 1: Spacing Exception Platt (4) if gas has been discovered, the drilling unit for the pool is a governmental section; not more than one well may be drilled to and completed in that pool on any governmental section; a well may not be drilled or completed closer than 3,000 feet to any well drilling to or capable of producing from the same pool. Not Applicable - Target is the Cosmopolitan Undefined Oil Pool 2. Requirements of 20 AAC 25.055 (b) A well may not begin regular production of oil from a property that is smaller than the governmental quarter section upon which the well is located or begin regular production of gas from a property that is smaller than the governmental section upon which the well is located, unless the interests of the persons owning the drilling rights in and the right to share in the production from the quarter section or section, respectively, have been pooled under AS 31.05.100. BlueCrest Energy is the only operator and 100% working interest owner within the Cosmopolitan Unit. 3. Requirements of 20 AAC 25.055 (c) A pooling agreement under AS 31.05. 100 must be filed with the commission before regular production from the affected property begins. The leases currently being exploited by BlueCrest Energy all fall within the currently unitized Cosmopolitan Unit. Pool rules are not currently identified. 21Paga H16A Application for Spacing Exception lue E rgy 4. Requirements of 20 AAC 25.055 (d) Cosmopolitan Project H16A Application for Spacing Exception The commission will review on application for on exception to the provisions of this section in accordance with 20 AAC 25.540. The applicant for on exception shall send notice of the application by certified mail to the owners, landowners, and operators described in (1) of this subsection and shall furnish the commission with a copy of the notice, the dote of mailing, and the addresses to which the notice was sent The application must include (1) the names of all owners, landowners, and operators of all properties within 1,000 feet of a well drUling for oil or within 3,000 feet of a well drilling for gas for which an exception is sought BlueCrest Energy LLC Alaska Division of Natural Resources (ADNR) Please see Attachment 3: Notification Information (2) a plat drawn to a scale of one inch equaling 2,640 feet or larger, showing the location of the well for which the exception is sought all other completed and drilling wells on the property, and all adjoining properties and wells; and Please see Attachment 1: Spacing Exception Platt (3) an affidavit by a person acquainted with the facts, verifying that all facts are true and that the plat correctly portrays pertinent and required data. Please see Attachment 2: Affidavit S. Attachments Attachment 1 Spacing Exception Platt Attachment 2 Affidavit Attachment 3 Notification information 31Page H16A Application for Spacing Exception H16A With 1000' Radius Around Production Section Bou oQsl®t® R H16A Surface Location (NAD 27) Northing: 2,145,914.43, Easting 188,970.57 2,408' FSI, 1509' FEL, Sec. 2, T4S, R15W SM Surface Casing Point Northing: 2145773.&15' Easting: 167211.107 3,414' FSL, 3,429' FEL, Sec. 2, US, R15W SM Bottom of Window �Nodhing: 2,150,581.45, Easting: 158,778.19' 2,572' FSL, 1,182' FEL, Sec. 33, T3S, R15W St Total Depth Northing: 2,155,347.00, Easting: 151.874.W 1,950' FSL, 2,933' FEL, Sec. 29, T3S, R15W SM — - aCosmopolitan Unit Development 101OR2018 MvCrest Energy ADL18790 0 1000 2000 3000 4000 5000nU5 V_ 1:30000 8 I SGC 3E. n SEC 1. Tie. !ue st Energy July 12, 2018 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7"' Avenue, Suite 100 Anchorage, Alaska 99501 RE: Spacing exception for the proposed H16A Well Dear Commissioners, BlueCrest Alaska Operating LLC is requesting a spacing exception for the proposed H16A well. Cosmopolitan Project BlueCrest Energy - H1BA Affidavit BlueCrest Alaska Operating LLC 3301 C Street, Suite 202 Anchorage, AK 99503 I, Andrew Buchanan, verify that the facts stated are true and the plat correctly portrays all pertinent and required data. Regards, Andrew Buchanan Sr. Operations Geologist BlueCrest Alaska Operating LLC Phone (907) 754-9563 The foregoing instrument was acknowledged before me on the /C� day of6l� t _ 2018. By Andrew A. Buchanan. t Brunt H. Warrick Notary Public in and for Alaska '�77 rr--�� Notary Public. State of Alaska 201020 My Commission Expires: � 61 , [D19 t y Commission si 141 xpires p �— My Commission F�cpiree December 1, 2018 BlueCrest Energy - H16A Affidavit 07/12/2018 Alaska DeparfigerWW Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 /I Anchorage, Alaska 995013560. !-- O 4 un M Certified Mal Fee F P, $ $3.45 M Extra Se Ci & Fs Fees fch tux, a de ".aFPIM i5' ❑Regan RwelpttthalmopY) E 11 III a ru ❑nmm Racapt (alecwniel E - aid, OrrP ma 3 C3 ❑ Cadaiad Mail RasWctetl Delivery E 7 /' 0 ❑MUX Signature Rpuired $ Z ❑Mun SigtutureResbic1e00etivery 8't .. _./Ca iel�� •/ 07.71212013 Alaska DeparQt)Gggof Natural Resources -Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 L o �- Anchorage, Alaska 99501-3560. `^ AricFltleAae AI v+.a:-. 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