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Home My WebLink AboutCO 751CONSERVATION ORDER 751 Docket Number: CO -18-019 1. July 12, 2018 BlueCrest 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 7" Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF B1ueCrest ) Docket Number: CO -18-019 Alaska Operating LLC to drill, complete, ) Conservation Order 751 test, and produce the Hansen H -16A -L02 ) Cosmopolitan Unit development oil well branch within the ) Hansen Undefined Oil Pool same governmental quarter sections as, and ) Hansen H -16A-1,02 within 1,000 feet of, wells and well branches ) Oil Development Well Branch that are, or may be capable of, producing ) Kenai Peninsula Borough, Alaska from the same pool. ) September 13, 2018 IT APPEARING THAT: By a letter received July 12, 2018, B1ueCrest Alaska Operating LLC (B1ueCrest) requested an exception to the statewide spacing requirements of 20 AAC 25.055 to drill, complete, test, and produce the Hansen H -16A -L02 development oil well branch 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. B1ueCrest 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 I -1 -16A -L02 development well branch—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. BlueCrest'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-1,02 will be a development oil well branch 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 CO 751 September 13, 2018 Page 2 of 3 offshore about 4,173 feet FSL and 3,498 feet FEL of Section 33, Township 3 South (T3S), Range 15 West (R15W), S.M. The bottom -hole location will lie offshore about 4,967 feet FSL and 4,721 feet FEL of Section 33, T3S, R15W, S.M. 3. The surface location for Hansen H -16A -L02 lies on private property. The top -of -productive interval and bottom -hole locations will lie within State of Alaska lease ADL 384403. 4. Hansen H -16A-1,02 will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H -16A-1,02 will be located within the governmental quarter sections as, and 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 1A, Hansen IA -Ll, Hansen H-12, Hansen H -12-L01, Hansen H -12-L02, Hansen H -12-L03, Hansen H-14, and Hansen H -14L1. 6. The well path and bottom -hole location for Hansen H -16A-1,02 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-1,02 development oil well branch 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-1,02 well branch 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-1,02 development oil well branch 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. i Pamel T. Seamount, Jr.�,rCathy P. Foerster mmissioner Commissioner CO 751 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 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 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 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 ours until 5:00 p.m. on the next day that does not fall on a weekend or state STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION 333 West 71n Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF B1ueCrest ) Docket Number: CO -18-019 Alaska Operating LLC to drill, complete, ) Conservation Order 751 test, and produce the Hansen H -16A -L02 ) Cosmopolitan Unit development oil well branch within the ) Hansen Undefined Oil Pool same governmental quarter sections as, and ) Hansen 11 -16A -L02 within 1,000 feet of, wells and well branches ) Oil Development Well Branch that are, or may be capable of, producing ) Kenai Peninsula Borough, Alaska from the same pool. ) September 13, 2018 IT APPEARING THAT: 1. By a letter received July 12, 2018, B1ueCrest Alaska Operating LLC (B1ueCrest) requested an exception to the statewide spacing requirements of 20 AAC 25.055 to drill, complete, test, and produce the Hansen H -16A -L02 development oil well branch 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. B1ueCrest 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 -L02 development well branch—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. BlueCrest's application provided sufficient information upon which to make an informed decision. FINDINGS: 1. B1ueCrest is the operator and sole working interest owner of the Cosmopolitan Unit, located within the Cook Wet, Kenai Peninsula Borough, Alaska. 2. Hansen H -16A -L02 will be a development oil well branch 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 CO 751 September 13, 2018 Page 2 of 3 offshore about 4,173 feet FSL and 3,498 feet FEL of Section 33, Township 3 South (T3S), Range 15 West (R15W), S.M. The bottom -hole location will lie offshore about 4,967 feet FSL and 4,721 feet FEL of Section 33, T3S, RI 5W, S.M. 3. The surface location for Hansen H -16A-1,02 lies on private property. The top -of -productive interval and bottom -hole locations will lie within State of Alaska lease ADL 384403. 4. Hansen H -16A-1,02 will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H -16A -L02 will be located within the governmental quarter sections as, and 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, Hansen H -12-L02, Hansen H -12-L03, Hansen H-14, and Hansen H -14L1. 6. The well path and bottom -hole location for Hansen H -16A -L02 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 -L02 development oil well branch 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-1,02 well branch will not result in waste or jeopardize correlative rights of adjoining or nearby owners. NOW THEREFORE IT IS ORDERED: The AOGCC grants B1ueCrest'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 -L02 development oil well branch 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. //signature on file// //signature on file// Daniel T. Seamount, Jr. Cathy P. Foerster Commissioner Commissioner CO 751 September 13, 2018 Page 3 of 3 As provided in AS 31.05.080(x), 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 ofthe matter determined by h. If the notice was mailed, then the period of lime 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 pan within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. tribe AOGCC denies reconsideration, upon denial, this order or decision and the denial ofrewreideri tion 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 dale 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 ifthe AOGCC otherwise distributes, the order or decision on reconsideration. a period of time above, the dam of the event or default after which the designated period begins to nm is not included in the period; the last day of the ded, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state 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 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Monday, July 23, 2018 12:43 PM To: Ballantine, Tab A (LAW); Bell, Abby E (DOA); Bixby, Brian D (DOA); Boyer, David L (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Earl, Adam G (DOA); Erickson, Tamara K (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Laubenstein, Lou (DOA); Loepp, Victoria T (DOA); Martin, Teddy J (DOA); McLeod, Austin (DOA); Mcphee, Megan S (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Rixse, Melvin G (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWellintegrityCoordinator; Alan Bailey; Alex Demarban; Alicia Showalter; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Lewallen; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Bonnie Bailey, Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cody Gauer; Cody Terrell; Colleen Miller, Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Danielle Mercurio; Darci Horner; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Pascal; ddonkel@cfl.rr.com; Diemer, Kenneth J (DNR); DNROG Units (DNR sponsored); Donna Ambruz, Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Brown, Garrett A (DNR); George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Greg Kvokov; Gretchen Stoddard; gspfoff; Hurst, Rona D (DNR); Hyun, James 1 (DNR); Jacki Rose; Jason Brune; Jdarlington Qarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine; Jim Watt; Jim White (im4thgn@gmail.com); Young, Jim P (DNR); Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); Jon Goltz; Joshua Stephen; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance, Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Kyla Choquette; Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt, Mark Wedman; Michael Bill; Michael Calkins, Michael Moora; Michael Quick; Michael Schoetz; Mike Morgan; MJ Loveland; Motteram, Luke A; Mueller, Marta R (DNR); Nathaniel Herz; knelson@petroleumnews.com; Nichole Saunders; Nick Ostrovsky, NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Tirpack; Robert Warthen; Ryan Gross; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); Spuhler, Jes J (DNR); Stephanie Klemmer; Stephen Hennigan; Stephen Ratcliff; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Tanisha Gleason; Ted Kramer; Teresa Imm; Terry Caetano; Tim Mayers; Todd Durkee; Tom Maloney, Tyler Senden; Umekwe, Maduabuchi P (DNR); Vern Johnson; Vinnie Catalano; Well Integrity, Well Integrity, Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Casey Sullivan; Corey Munk; Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Scott Pins; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke; Zachary Shulman Subject: Public Notice BlueCrest Energy Attachments: CO -18-017 thru CO -18-024 Public Hearing Notice.pdf Please see attached. Jody J. Cotambie AOGCC SpeciaC.Assistant .Alaska OiCandGas Conservation Commission 333 West 7'" .Avenue -Anchorage, .ACaska 99501 Office: (907) 793-1221 ,Tax: (907) 27x-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombieQaloska.aov. Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWPIG ADVERTISING ORDER NO, CERTHTED AFFIDAVU OFFUBLICATION WHH ATTACHED COPY OF ADVER7I5MENT. ADVERTISING ORDER NUMBER 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 TYPF OF ADVF,RI7SEMENT: '' LEGAL DISPLAY CLASSIFIED OTHERS pe city be low) DESCRIPTION PRICE Docket NO's CO-18-017 through CO-18-024 Initials of who prepared AO: Alaska Non -Taxable 92-600185 s➢aMlr IlwaieE suo W rntGalivEBT ISHac: :�. OR➢ERNO.; CERTIFIED AFFIDAVROF:. . ......... ..... ............ ... ::FueciewT�oNmPH:ATrAelmlCOPY OFoF: ::A➢vTCRn67':ioi::::::::: ........ .................... AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Pae I of I Total of All Paces $ - REF T Number Type Amount Date Comments t PvN VCO21795 2 Ao AO-19-001 3 4 FIN AMOUNT SY I Act T.ni I PGM LGR Object FY DIST LIQ I 19 A14100 3046 19 2 3 4 P rehasin �. A r e Titl: Purchasing Authority's Signature Telephone Nmnber 1. AAA a receiNng agency name must I invoices and documents relating to this purchase. 2. h stale is registered for tax free transactions under Chapter 32. IRS code Registration number 92-73-0006 K. Items are for the exclusive use ofthe state and not for re DISTRIBUTION 6.. pmslon Eueal[Orfgiltiilrt0 ............................. :;Copies:Piltilisker{fazed),TLvismt.Eiscal, Reeelvfrig Form: 02-901 Revised: 7/23/2018 ANCHORAGE JUL 2 6 2018 AFFIDAVIT OF PUBLICATION AOGCC Account#: 270227 ST OF AK/AK OILAND GAS Order# 5117 $249.0 CONSERVATION COMMISSION Cost 5249.02 333 WEST 7TH AVE STE 100 &Kir`wnAanF avooen+nczo STATE OF ALASKA THIRD JUDICIAL DISTRICT Joleesa Stepetin _ being first duly sworn on oath deposes and says that he/she is a representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on July 24, 2018 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed6 Jole a Steoetin Subscribed and sworn to before me this 24th day of July, 2018 bulnW 0hmdwn Notary Pu Ic i and for The State of laska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES 3 19 Product ANC -Anchorage Daily News Placement 0300 Position 0301 Notice Of Public Nearing ALASKA OIL ANDSTATE OF 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 -18-024 The applications of BlueCrest Energgyy (BlueCrest) for an exception to the stlacing requirements of 20 AAC 25 055 for the drillinjgLOf the Hansen 1N16AL03e1Hansen H 16A LO4 H nsenl H 16AeL05, 1Hansen Hansen 16A L06, and Hansen H -16A-1-07 well branches. BlueCrest, by letter aate tl 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 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. The AOGCC has tentative) scheduled a public hearing on this application veinuet� Ancho nage, Alaske 995018. at equestnthat the3tentatively 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 heating is not timely filed, the AOGCC mayy consider the issuance of an order without a hearinSS. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after Aueust 1o. ems If, because of a disability, special accommodations may be needed to comment or attend the heanng, contact the AOGCC's Sppeedal Assistant, Jody Colombia, at (907) 793-1221, no later than August 30, 2018. Published: July 24, 2018 //signature on file// Hollis S. French Chair, Commissioner LNotary Public TNEYL. THOMPSON State of Alaska ssion Expires Feb 23, 2019 1 fue t Energy July 12, 2018 Alaska Oil and Gas Conservation Commission 333 West 7"' Avenue, Suite 100 Anchorage, Alaska 99501 Cosmopolitan Project BlueCrest Energy - H16A-L02 Spacing Exception_AOGCC 3301 C Street, Suite 202, Anchorage, AK 99503 Larry Burgess Phone: (907)754-9552 Email: lburgess@bluecrestenergy.com RE: Application for Spacing Exception for H16A-L02 Onshore Horizontal Producer J U L 122 2;038 `^( Dear Commissioners, AOGCC BlueCrest Alaska Operating LLC hereby applies for a spacing exception for the horizontal production well H16A-L02. H16A-L02 will Ile 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 303' azimuth we are drilling for hole stability, there are multiple instances where two or more of the laterals will be within the same X 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 Burgess Alaska Manager BlueCrest Energy - H16A-LO2 Spacing Exception_AOGCC /ue Energy Application for Spacing Exception Horizontal Producer Hi 6A-to2 Table of Contents Cosmopolitan Project H16A-1-02 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)........................................................................2 3. Requirements of 20 AAC 25.055 (c) ........................................... 4. Requirements of 20 AAC 25.055(d)........................................................................3 5. Attachments..............................................................................................................3 Attachment 1 Spacing Exception Platt .........................................................................................................3 Attachment2 Affidavit.............................................................................................. Attachment 3 Notification information....................................................................... 11 Page H16A-L02 Application for Spacing Exception 3 3 iur , r t Energy 20 AAC 25.055. Drilling units and well spacing 1. Requirements of 20 AAC 25.055 (a) Cosmopolitan Project H16A-1-02 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 pattern for a pool, the following statewide spacing requirements apply: (1) for a welt drilling for oil, a wellbore may be 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 same 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 quartersection; a well moy 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 some 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 o 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 31.05.200 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. 21 Pa g 1416A -L02 Application for Spacing Exception IiYC'�,. i"t Energy 4. Requirements of 20 AAC 25.055 (d) Cosmopolitan Project Ht 6A -L02 Application for Spacing Exception The commission will review an application for on exception to the provisions of this section in accordance with 20 AAC 25.540. The applicant for an exception shall send notice of the application by certified moil to the owners, landowners, and operators described in (1) of this subsection and shall furnish the commission with o copy of the notice, the dote of mailing, and the addresses to which the notice was sent. The application must include (I) the names of all owners, landowners, and operators of all properties within 1,000 feet of a well drilling 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 5. Attachments Attachment 1 Spacing Exception Platt Attachment 2 Affidavit Attachment 3 Notification Information 3lpaga H16A-La2 Application for Spacing Exception H16A & H16A-L02 With 1000' Radius NE►� — 1 r H16A-L02 Surface Location (NAD 27) Northing: 2,145,914.43, Easting 166,970.57' 2,408' FSL, 1509' FEL, Sec. 2, T4S, R15W SM Surface Casing Point Northing: 2145773.805' Easting: 167211.107 3,414' FSL, 3,429' FEL, Sec. 2, T4S, RI 5W SM Kick Off Point Northing: 2,152,215.83', Easting: 156,551.25' 4,144' FSL, 3,452' FEL, Sec. 33, T3S, R16W St Total Depth Northing: 2,153,074.00'. Easting: 155,305.00' 4,96T FSL, 4,721' FEL, Sec. 33, T3S, R1 SW SA ADL18790 81ueGtest Eneryy� 0 200 Cosmopolitan Unit Development 1000 0 3000 4000 SOOOftUS - 1:30000 Maw sec, US, I ur st Enemy July 12, 2018 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7'h Avenue, Suite 100 Anchorage, Alaska 99501 RE: Spacing exception for the proposed H16A-L02 Well Dear Commissioners, Cosmopolitan Project BlueCrest Energy - H16A-L02 Affidavit BlueCrest Alaska Operating LLC 3301 C Street, Suite 202 Anchorage, AK 99503 BlueCrest Alaska Operating LLC Is requesting a spacing exception for the proposed H16A-L02 well. 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 /;2- day of � Ld 2018. By Andrew A. Buchanan. Notary Public in and for Alaska oD/ p My Commission Expires: N to Brunl H. Warrick Notary Public. State of Alaska Commission # 1 41 201 020 My Commission Expires December 1, 2018 BlueCrest Energy- H16A.L02 Affidavit M. 11kill .\ILoieT=r&TE e s m r. N m OnCC) Certified Mail Fee $3. 4 � Ln ANC. ft j[1,K,9171 f f cid m c13 $ Certified Mail Fee s- T: s _ El Flaunt E Y ❑Retum Receiptoarccopy) $ II ❑ Raum Recapt lnunci, .l E it lit ❑Return Recede(elswnid $ It II I¢ M Exna Services & Fees,of 1 .x, sdd.ee Jq Receipt (Taut...) 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Ln ANC191 FF rsY.9'k11; N Unit Manager Co Certified Mail Fee -- -- Certdied Mail Fee M M $ �a Utra Services& Fees (cbw, etltlke $iip'q °W Extra Services& Fees(check box, ado ke El Flaunt E Y ❑Retum Receiptoarccopy) $ II W ❑Return Recede(elswnid $ It II I¢ 'M ztp `$r7"_ w 1 ❑CMified MLIR fritted ))¢livery $ WW Here. N ❑Adult SignaureRequired Is Af, Mull Signature Restated 13 r ' E \� ❑Atlult Signature Rfricted Dal'rvery$ Postage $I .2i `6� r NY p 40 1�Y" Pne.ano $1.21 t Alaska Depaig{PV" of Natural Resources f1f1�l3tule5 Division of Oil and Gas Unit Manager C 550 W 7th Ave, Suite 1100 L� r Anchorage, Alaska 99501-3560. 1 m m n- m ru 0 C3 C3 C3 ?'t77. )'2(.113 Alaska DepartA'64W Natural Resources - Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. L 7 _ m In m ANCiAir:�'Y4U1: U M 4 l c zu,.. � cc Germed Mail Fee - SE S? 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At?.1`nFAGE r fi =951]1 � r m ra Certified Mal Fee Ir $ S�.45 P M E tra Services & Face (c b.x, addhx,9p q ❑flaum RA-eip, �ardc.'h $ IIPI�I1 � iil ❑fletum Hereat laecmnlo) $ n,ll '0'— C3 ❑Cervi fietl Mail RagMnM Delivery E ❑ •-,-? t O AduX SigraNre Requ'ved $ ❑AduX Sigraw. sud ood, wli ,, E I 0 Postage 51.21 Fr7rr/2018 Alaska DepargerWof Natural Resources - Units Section Division of Oil and Gas N Unit Manager 550 W 7th Ave, Suite 1100 1 -02 - bZAnchorage, Anchorage, Alaska 99501-3560. ExtaSe ices&Fees( kw,addees' crel Alaska Depardrientlof Natural Resou?-n Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 L c Anchorage, Alaska 99501-3560. 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C3 Postage $1.21 07112/2015 $7.41 Bureau of Ocean Energy Management -Alaska Region Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. 8/60A - Ga3 Postal CERTIFIED MAILP RECEIPT nu vomestic Mail Only tr fll in flNCf#UF:#f,•f s At M Celtlfied Ma FeeP 1 '' 4 �F.. - a- $ Pc 12 M Extra Se ices& Fees (cre xbox,a$k a$ ❑Rehm Receipt (Rardcgpy) Qc t'P� ru ❑Rmpmneceipt(elselmmr) $ C3 $ _ • O C3 0Mutt Signature Repu H $ C3 OAdua Signature Fesldctea NNtuY$ Postage 07f12i2i.11° $7.41 Bureau of Ocean Energy Management - Alaska Region I Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 995031 Un l m so Q" M ni 0 O C3 C3 r $7.41 Bureau of ocean Energy of easing and Plans Management - Alaska Region offic3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. 0161 LnANC pF .11649 1'3' .0 Certified Mal Fee $3.45 -tc C>4' PK pdJ, Ir $ M Extra Services & Fees (cne xaox, oada sl l PI I te) QP O [01Retun Receipt (llartlwPY) $ rU 0Rewm Receipt(Aechonic) S I:tl Peostmark eR 4 ❑cedrea Mali Restdnea oervery S are rn C3 ❑ Aaunt Signature Rapuirad $ C3 ❑Alun smratma Restdctea DePesrv$ C3 Postage $7.41 Bureau of Ocean Energy Management -Alaska Region Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. q, I D$ r: e M ExtraServices 8 Fees pseek Dox, a fee al I kakl J/ls ❑Rapm Receipt o"ccpO S— NORetum Receipt(Mectmnlq E li %Il p C3 ❑Cedoed MallflesldctaOOellvery $ 1U1>r/ Her Q C3 OAduft Signature Repuired $ \ A� tl` C3 OAAult SgnstureRestricted Delive,yE 'I`l 11w, L' Pnelage $1.21 i 17 n 11 ¢?015 r $7.41 Bureau of Ocean Energy Management -Alaska Region Office of Leasing and Plans C 3801 Centerpoint Drive, Suite 500 r Anchorage, Alaska 99503. ly j/0 -/'1---L07