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Home My WebLink AboutCO 755CONSERVATION ORDER 755 Docket Number: CO -18-023 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 BlueCrest Alaska Operating LLC to drill, complete, test, and produce the Hansen H -16A-1,06 development oil well branch within the same governmental quarter sections 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 -18-023 Conservation Order 755 Cosmopolitan Unit Hansen Undefined Oil Pool Hansen H -16A -L06 Oil Development Well Branch 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 -L06 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. 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 -L06 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. 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 -L06 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 offshore about 633 feet FSL and 901 feet FEL of Section 29, Township 3 South (T3S), Range CO 755 September 13, 2018 Page 2 of 3 15 West (R15W), S.M. The bottom -hole location will lie offshore about 1,334 feet FSL and 1,982 feet FEL of Section 29, T3 S, RI 5W, S.M. 3. The surface location for Hansen H -16A-1,06 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-1,06 will target reservoirs within the Hansen Undefined Oil Pool. Hansen H -16A -L06 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 -Ll, Hansen H-12, Hansen H -12- L03, Hansen H-12-1,04, Hansen H-12-1,05, Hansen H-12-1,06, Hansen H-14, and Hansen H - 14L1. 6. The well path and bottom -hole location for Hansen H -16A-1,06 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-1,06 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-1,06 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 -L06 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. ('Daniel T. Seamount, Jr. ,Cathy P. Foerster WCommissioner Commissioner CO 755 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 grunts 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 ran 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 that does not fall on a weekend or state STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71 Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF B1ueCrest Alaska Operating LLC to drill, complete, test, and produce the Hansen H -16A -L06 development oil well branch within the same governmental quarter sections 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 -18-023 Conservation Order 755 Cosmopolitan Unit Hansen Undefined Oil Pool Hansen H -16A -L06 Oil Development Well Branch Kenai Peninsula Borough, Alaska September 13, 2018 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 -L06 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 -L06 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. B1ueCrest 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-1,06 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 offshore about 633 feet FSL and 901 feet FEL of Section 29, Township 3 South (T3S), Range CO 755 September 13, 2018 Page 2 of 3 15 West (R15W), S.M. The bottom -hole location will lie offshore about 1,334 feet FSL and 1,982 feet FEL of Section 29, T3S, R15W, S.M. 3. The surface location for Hansen H -16A -L06 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 -L06 will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H -16A-1,06 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 lA-Ll, Hansen H-12, Hansen H -12- L03, Hansen H -12-L04, Hansen H -12-L05, Hansen H -12-L06, Hansen H-14, and Hansen H - 14L1. 6. The well path and bottom -hole location for Hansen H -16A -L06 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-1,06 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-1,06 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 -L06 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. a,oi�.wn //signature on file// //signature on file// `�'' Daniel T. Seamount, Jr. Cathy P. Foerster Commissioner Commissioner j eq�noN co� CO 755 September 13, 2018 Page 3 of 3 As provided in AS 31.05.080(a), within 20 days after written rrotice of the entry of this order or decision, or such further time as the AOGCC grams for good cause shown, a person affected by it tray file with the AOGCC an application for reconsideration of the matter detemdned by it. Ifthe entice 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 pan within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. Ifthe AOGCC denies reconsideration, upon denial, this order or decision and the denial ofreconsideration 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 recomideration, this order or decision does not become fiml. Rather, the order or decision on mconsidemtion will be the FINAL order or decision ofthe AOGCC, and it may be appealed to superior corm. That appeal MUST be filed within 33 days after the data on which the AOGCC mails, OR 30 days ifthe AOGCC otherwise distributes, the order or decision on reconsideration In computing a period of time above, the data of the event or default after which the designated period begins to urn is not included in the period; the last day of the period is included, unless it Polls on a weekend or state holiday, in which event the period must 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 AM i 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-1,01, Hansen H -16A-1,02, Hansen H -16A-1,03, Hansen H -16A-1,04, Hansen H -16A-1,05, Hansen H -16A -L06, and Hansen H -16A-1,07 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 TALI, 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 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, AKDCWelllntegrityCoordinator, 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 J (DNR); Jacki Rose; Jason Brune; Jdarlington (arlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine; Jim Watt, Jim White Qim4thgn@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 Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Fairbanks, AK 99711 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 !al ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTLSMENT. ADVERTTSING ORDER N7JMHER 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 beloi DESCRIPTION PRICE Docket NO's CO-18-017 throi CO-18-024 Initials of who prepared AO: Alaska Non -Taxable 92-600185 9lialdi INVOICE SaoWA,'GAD.VERTISINa .. . .... . ..... .. .. ... ::ORDER?!&.; CERTIFIED AFFIDAVIT OF :-T,i1BL¢'A'[IUN w7TH:ATTACHEDCOPYOF' .._...... ... ..< o: iYDV.E...S1. AI.......... AGGCC 333 WtSt 7th Avenue Anchorage, Alaska 99501 Page 1 of 1 Notal of All Pa es $ REF T Number Amount Date Comments I PVN VCO21795 2 AO-TAO-19 0-01 z 4 FIN AMOUNT SY Art Tem Tate I PGM LGR Ob ert FY DIST LIQ 1 19 A14100 3046 19 2 3 4 P rchasln /- A,! r TiIf : Purchasing Authority's Signatwe Telephone Number 1. a._ agency name must I inwices and documents relating to this purchase. 2 h state is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for Y2 DISfRIBUxION; ... DlYtsioTlFual[Oi4gilgalAO::Copies Pa,6luheC{faxed),1)nuion7iuel,I2eu:irinr, Form: 02-901 Revised: 7/23/2016 AN Ej'� �"�a RAGI 1. DA 1141' b "- 1. �+g�q_ y\ger �p�jr JUL 2 6 2018 AFFIDAVIT OF PUBLICATION AOGCC Account #: 270227 ST OF AK/AK OILAND GAS CONSERVATION COMMISSION 333 WEST 7TH AVE STE 100 nnirunanr-c nuoosniatio 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. Signedwla L Jole a Steoetin Subscribed and sworn to before me this 24th day of Jam, 2018 Notary Puis i and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES �l�3 l an 19 Order# Cost 0001425117 Product ANC -Anchorage Daily News $249.02 Placement 0300 Position 0301 Notice of Public Hearing ALASKA OIL AND STATE OF GAS CONSE VAT ON 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-18-021Docket Number: CO -18-022 - Docket Number: CO -18-023 Docket Number: CO -18024 The applications of BlueCrest Energy (BlueCreso for an exception to the spacing requirements of 20 AAC 25.055 for the drilling of the Hansen 6A-L03e1Hansen H 16A1-04 Ha sen H -16A -L05, 1Hansen H-16A-LA6, and Hansen H -16A-1.07 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 0f 20 AAC 25.055 because the proposed well sections as, antl wlthl b1 drilled O of WellstHansen 42eand Hansquarter n H 4 and well branch Hansen 1AL1, which are, or maybe capable of, Producing from the same pool. The AOGCC has tentative )yy scheduled a public hearing on this application for September 6, 2018, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, hea ling beAheldaa written regfue teMussttabetfiled 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 mayy consider . the issuance of an order Without a hearin To learn if the AOGCC will hold the hearing, call (907) 793-1221 after ugust 1o, 2018. Published: July 24, 2018 //signature on file// Hollis S. French Chair, Commissioner Notary Public h L NEY L. THOMPSON State of Alaska sion Expires Feb 23, 2019 1 1 st Ene-rgy July 12, 2018 Alaska 011 and Gas Conservation Commission 333 West 7" Avenue, Suite 100 Anchorage, Alaska 99501 Cosmopolitan Project BlueCrest Energy - H 16A-1-06 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 12 2013on for H16A-L06 Onshore Horizontal Producer p^� p+ Dear Commissioners, OG!- C BlueCrest Alaska Operating LLC hereby applies for a spacing exception for the horizontal production well H36A-LO6. H36A-LOE 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 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. Sincere Larry Burges Alaska Manager =4- BlueCrest Energy - H16A-L06 Spacing Exceplion_AOGCC tue t Energy Application for Spacing Exception Horizontal Producer H16A-L06 Table of Contents Cosmopolitan Project H16A-L06 Application for Spacing Exception 20 AAC 25.055. Drilling units and well spacing...........................................................2 7. 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) .................................................2 4. Requirements of 20 AAC 25.055(d)........................................................................3 5. Attachments..............................................................................................................3 Attachment I Spacing Exception Platt ......................................................................................................... 3 Attachment1 Affidavit............................................................................................................................... 3 Attachment 3 Notification Information........................................................................................................3 1jPage H16A-L06 Application for Spacing Exception Itue sr En rgy 20 AAC 25.055. Drilling units and well spacing 1. Requirements of 20 AAC 25.055 (a) Cosmopolitan Project H16A-Lo6 Application for Spacing Exception The commission will, in its discretion, establish drilling units to govern well spacing and prescribe a spacing pattern by Poo/ 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 well drilling for oil, a wellbore may be open to test or regular production within 50ofeet 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) for a 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 some 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 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. 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. 21Page H16A-La6 Application for Spacing Exception )ne Ene'rgy ` 4. Requirements of 20 AAC 25.055 (d) Cosmopolitan Project H 16A-1-06 Application for Spacing Exception The commission will review on application for on exception to the provisions of this section in accordance with 10 AAC 25.540. The applicant for an 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 date 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 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 drown 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 facM verifying that all facts are true and that the plat correctly portrays pertinent and required data. Please see Attachment 2: Affidavit S. Attachments Attachment I Spacing Exception Platt Attachment 2 Affidavit Attachment 3 Notification Information 3(Page H16A-LOG Application for Spacing Exception H16A & With 1000' Radius xrz�tas ,4 wrz-t + .. H16A-1.06 Surface Location (NAD 27) d Northing: 2,145,914.43', Easting 166,970.5T 2,406' FSL, 1509' FEL, Sec. 2, T4S, RI SW SM Surface Casing Point !Northing: 2,145,773.805' Eas6ng: 167211.107' 13,414' FSL, 3,429' FEL, Sec. 2, US, R15W SM !Kick OB Point Northing: 2,154,020.59', Easting: 153,930.60' 592' FSL, 839' FEL, Sec. 29, T3S, R15W SM Total Depth Northing: 2,154,794.00', Easting: 152,808.00' 1,334TSIL, 1,982' FEL, Sec. 29, T3S, R15W SM Cosmopolitan Unit Develment _. T.._; op-- _ l az 11N72018 BhreCrost Fs 0 1000 21I0B 31100 4000 50011BUS 1:30000 Section SEC 36 13 SEC 1 T1 E i�ENest Ene'rn, July 12, 2018 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7te Avenue, Suite 100 Anchorage, Alaska 99501 RE: Spacing exception for the proposed H16A-LO6 Well Dear Commissioners, Cosmopolitan Project BlueCrest Energy- H16A-LO6 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-106 well. 1, 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 12 day of 2018. By Andrew A. Buchanan. Notary Public in and for Alaska My Commission Expires: 201E Brunt H. Warrick Nouary Public. State of Alaska Commission # 1 41 201 020 My Commission Expires December 1, 2018 BlueCrest Energy - H16A-1-015 AFrdevir (17/12/2018 Alaska DeparNerklof Natural Resources - Units Section Division of Oil and Gas Unit Manager 550 W 71h Ave, Suite 1100 1-04 Anchorage, Alaska 99501-3560. O ILn Postal r, F, m CERTIFIED o RECEIPT # CC) Domestic 1111,4- mr L M m ANC .' r Y,f 9n. 11 Y t ,a" -E y CeNfied Mal Fee c 3 ��rG %IP�an - 117 a•r ./ekrN" O❑MUX Signature Required E - T" t]/ M Ext. S¢NIeeS & Fee, (clrecNOo; a dlix, ❑ ReWm Recap)(haresPPv) $ IryM d ❑Molt Signature Resldctetl DalveryS ti ❑Rehm Recaptlelectmnkl $ i Pne.a $1.21N Post t O 01 c nsw Mail Resbicretl Delivery E_±jj)-a.(j_ r Alaska Depa$pllelilp of Natural Resource's - C3 EJ "-it 819rin a RequireE $ . b, ❑MUX Signature Restndetl OeXvery SI.id C3 Postage $1.21 (17/12/2018 Alaska DeparNerklof Natural Resources - Units Section Division of Oil and Gas Unit Manager 550 W 71h Ave, Suite 1100 1-04 Anchorage, Alaska 99501-3560. 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