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Home My WebLink AboutCO 760CONSERVATION ORDER 760 Docket Number: CO -18-029 1. September 27, 2018 Hilcorp application for spacing exception H -04-L02 2. October 7, 2018 Notice of hearing, affidavit of publication, email distribution, mailings STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF BlueCrest ) Docket Number: CO -18-029 Alaska Operating LLC to drill, complete, ) Conservation Order 760 test, and produce the Hansen H-04-102 ) Cosmopolitan Unit development oil well branch within the ) Hansen Undefined Oil Pool same governmental quarter section as, and ) Hansen 14-04-102 within 1,000 feet of, a well that is, or may be ) Oil Development Well Branch capable of, producing from the same pool. ) Kenai Peninsula Borough, Alaska November 19, 2018 IT APPEARING THAT: 1. By a letter received October 1, 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-04-102 development oil well branch within the same governmental quarter section as, and within 1,000 feet of, a well that is, 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 November 8, 2018. On October 4, 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 October 7, 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 -04-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. 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 -04-L02 will be a horizontal, development oil well branch drilled directionally to the northwest from an onshore surface location at 2,173 feet from the south line (FSL) and 1,552 feet from the east line (FEL) of Section 2, Township 4 South, Range 15 West (R15W), Seward Meridian (S.M.). The top of the Hansen Undefined producing interval location will lie offshore about 987 feet FSL and 4,458 feet FEL of Section 33, Township 3 South (T3S), CO 760 November 19, 2018 Page 2 of 3 R.15 W, S.M. The bottom -hole location will lie offshore about 1,796 feet FSL and 447 feet FEL of Section 32, T3S, R15W, S.M. 3. For well branch Hansen H-04-LO2, the kick-off point, top -of -productive interval, and bottom - hole locations will lie within State of Alaska lease ADL 384403. 4. Hansen H-04-LO2 will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H-04-LO2 will be located within the same governmental quarter section as, and within 1,000 feet of, development oil well Hansen H-04 and development oil well branches Hansen H -04 -LO 1, Hansen H-04-LO3, Hansen H-04-LO4, and Hansen H-04-LO5 that are, or may be capable of, producing from the same oil pool. 6. The well path and bottom -hole location for Hansen H-04-LO2 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. 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 -04-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 -04-L02 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 October 1, 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-04-LO2 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 November 19, 2018. Hollis S. French Cathy. . /Foerster Daniel T. Seamount, Jr. Chair, Commissioner Commissioner Commissioner CO 760 November 19, 2018 Page 3 of 3 CORECONSIDERATION AND APPEAL NOTICE 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 runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7' Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF BlueCrest ) Docket Number: CO -18-029 Alaska Operating LLC to drill, complete, ) Conservation Order 760 test, and produce the Hansen H -04-L02 ) Cosmopolitan Unit development oil well branch within the ) Hansen Undefined Oil Pool same governmental quarter section as, and ) Hansen H -04-L02 within 1,000 feet of, a well that is, or may be ) Oil Development Well Branch capable of, producing from the same pool. ) Kenai Peninsula Borough, Alaska November 19, 2018 IT APPEARING THAT: 1. By a letter received October 1, 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 -04-L02 development oil well branch within the same governmental quarter section as, and within 1,000 feet of, a well that is, 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 November 8, 2018. On October 4, 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 October 7, 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 -04-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. 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-04-1,02 will be a horizontal, development oil well branch drilled directionally to the northwest from an onshore surface location at 2,173 feet from the south line (FSL) and 1,552 feet from the east line (FEL) of Section 2, Township 4 South, Range 15 West (RI 5W), Seward Meridian (S.M.). The top of the Hansen Undefined producing interval location will lie offshore about 987 feet FSL and 4,458 feet FEL of Section 33, Township 3 South (T3S), CO 760 November 19, 2018 Page 2 of 3 R15W, S.M. The bottom -hole location will lie offshore about 1,796 feet FSL and 447 feet FEL of Section 32, T3 S, RI 5 W, S.M. 3. For well branch Hansen H -04-L02, the kick-off point, top -of -productive interval, and bottom - hole locations will lie within State of Alaska lease ADL 384403. 4. Hansen H -04-L02 will target reservoirs within the Hansen Undefined Oil Pool. 5. Hansen H -04-L02 will be located within the same governmental quarter section as, and within 1,000 feet of, development oil well Hansen H-04 and development oil well branches Hansen H -04 -LO I. Hansen H -04-L03, Hansen H -04-L04, and Hansen H -04-L05 that are, or may be capable of, producing from the same oil pool. 6. The well path and bottom -hole location for Hansen H -04-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. 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 -04-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 -04-L02 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 October 1, 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 -04-L02 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 November 19, 2018. ,OIL I� //signature on fileH //signature on fileH //signature on fileH Hollis S. French Cathy P. Foerster Daniel T. Seamount, Jr. �>PION Chair, Commissioner Commissioner Commissioner CO 760 November 19, 2018 Page 3 of 3 CORECONSIDERATION AND APPEAL NOTICE 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 runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 AnchorageAK 99508-4336 SoldotnaAK 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 2 STATE OF ALAS" ADVER'T'ISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION ENATTACHED COPY OF ADVERTISMT. ADVERTISING ORDER NUMBER A®_19-011 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 10/4/2018 AGENCY 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 DailyNews, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT; LEGAL �` DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE CO -18-027 thru CO -18-034 Initials of who prepared AO: Alaska Non -Taxable 92-600' SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF AOGCC PUBLICATION WITH ATTACHED COPY'OF 333 West 7th Avenue Total of ADVERTISMENT TO: Anchorage, Alaska 99501 Pae 1 of 1 All Pages $ - REF Tye Number Amount Date Comments I PVN VCO21795 2 Ao AO -19-011 3 4 FIN AMOUNT SY Act. Template PGM LGR Object FY DIST LIQ I 19 A14100 3046 19 2 3 4 ; 5 Purch i r11 A th ty e. Title: Purchasing Authority's Signature Telephone Number i 1. O # a receiving agent ame st appear on all invoices and documents relating to this purchase. ter 32 2. �Th state is registered for tax free transactions under Chapter , IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not if) DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 10/3/2018 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-027 Docket Number: CO -18-028 Docket Number: CO -18-029 Docket Number: CO -18-030 Docket Number: CO -18-031 Docket Number: CO -18-032 Docket Number: CO -18-03 3 Docket Number: CO -18-034 The applications of BlueCrest Energy (BlueCrest) for an exception to the spacing requirements of 20 AAC 25.055 for the drilling of the Hansen H-04 well and the Hansen H-04-LOI, Hansen H- 04-LO2, Hansen H-04-LO3, Hansen H-04-LO4, Hansen H-04-LO5, Hansen H-04-LO6, and Hansen H-04-LO7 well branches. BlueCrest, by letter dated September 27, 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 lie within 1,000 feet of wells or well branches that are, or maybe capable of producing from the same pool. The AOGCC has tentatively scheduled a public hearing on this application for November 8, 2018, at 10:00 a.m. at 333 West 7th 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 4:30p .m. on October 24, 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 October 25, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on November 7, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the November 8, 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 November 5, 2018. Hsignature on fileH Cathy P. Foerster Commissioner Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 FairbanksAK 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 .. ...... . �vkM B 1: , t IC �7_Y�C�J� Account #: 270227 Order# 0001428719 Product ADN -Anchorage Daily News ST OF AK/AK OIL AND GAS Cost $283.88 Placement 0300 CONSERVATION COMMISSION Position 0301 333 WEST 7TH AVE STE 100 Aklrwnpar-r: AW CaRnil1r.10 STATE OF ALASKA THIRD JUDICIAL DISTRICT Sarah Jennett 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 October 07, 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 fore oing publication is not in excess of the rate fore 'ed private individuals. Signe Sarah-Jennett Subscribed and sworn to before me this 8th day of October, 2018 Notary Public, in and for The State of aska. Third Division Anchorage, Alaska MY COMMISSION EvOIRES le%n 17 Notary Public BRITNEY L. THOMPSON I State of Alaska My'Commlssion Expires Feb 23, 2019 Notice of Public Hea7l�ng STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-027 Docket Number: CO -18-028 Docket Number: CO -18-029 Docket Number: CO -18-030 Docket Number: CO -18-031 Docket Number: CO -18-032 Docket Number: CO -18-033 Docket Number: CO -18-034 The applications of BlueCrest Energy (BlueCrest) for an exception to the spacing requirements of 20 AAC 25.055 for the drilling of the Hansen H-04 well and the Hansen H-04-1-01, Hansen H-04-1-02, Hansen H-04-1-03, Hansen H-04-1-04, Hansen H- 04-1-05, Hansen H-04-1-06, and Hansen H-04-1-07 Well branches. BlueCrest, by letter dated September 27, 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 lie within 1,000 feet of wells or well branches that are, or maybe capable of producing from the same pool. The AOGCC has tentatively scheduled a public hearing on this application for November 8, 2018, at 10:00 a.m. at 333 West 7th 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 October 24, 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 October 25, 2018. In addition, comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on November 7, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the November 8, 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 November 5, 2018. //signature on file// Cathy P. Foerster Commissioner Published: October 7, 2018 1 /1ue e , Energy September 27,,2018 Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Cosmopolitan Project BlueCrest Energy - H04-1-02 Spacing Exception AOGCC 3301 C Street, Suite 202, Anchorage, AK 99503 Larry Burgess Phone: (907) 754-9552 Email: Iburgess@bluecrestenergy.com RE: Application for Spacing Exception for H04-1.02 Onshore Horizontal Producer 0r T 0 1 Dear Commissioners, BlueCrest Alaska Operating LLC hereby applies for a spacing exception for the horizontal production well H04402. Reservoir modeling Indicates that the optimum spacing for the laterals is 800'. Because of that spacing, the laterals conflict with each other. 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 Xsection. 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 0011 and Gas (ADNIR 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. 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. ely Sincer:;, �s Larry Burgess Alaska Manager 13lueCrest Energy - H04 -L42 Spacing Exception —AOGCC llueCest Energy Applicativon for Spacing Exception Horizontal Producer H04 -L 02 Table of Contents Cosmopolitan Project 1-104-1-02 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)........................................................................ 2 4. Requirements of 20 AAC 25.055 (d)....................................................................... 3 5. Attachments ■............................................................................ ■ ............................... 3 Attachment 1 Spacing Exception Platt......................................................................................................... 3 Attachment 2 Affidavit.............................................................................................................................. 3 Attachment 3 Notification Information....................................................................................................... 3 1IPage H04 -L02 Application for Spacing Exception Ilue est Energy 20 AAC 25.055. Drilling units and well spacing 1. Requirements of 20 AAC 25.055 (a) Cosmopolitan Project H04-1-02 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 an 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 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) 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 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 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 same Pool,- Please ool; 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 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. 21Page H04 -L02 Application for Spacing Exception Ilue" est Energy 4. Requirements of 20 AAC 25.055 (d) Cosmopolitan Project H04-1-02 Application for Spacing Exception The commission will review an application for an 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 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) Bureau of Ocean Energy Management (BOEM) 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 3 1 P a g e H04 -L02 Application for Spacing Exception llueNepst En-.,�gy September 27, 2418 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, suite 100 Anchorage, Alaska 99501 RE: Spacing exception for the proposed H04402 Well Dear Commissioners, Cosmopolitan Project BlueCrest Energy - 1-104-1-02 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 H04402 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 X)eday of ..�bw-r2018. By Andrew A. Buchanan. � /) 9 V Notary Public in and for Alaska My Commission Expires: 2-w 10i Aa Brum H. Warrick Notary Public, State ofAlaska CoMmISSIon # 141201020 My COMMission EXpires December 1, 2018 BlueCrest Energy - H04-LO2 Affidavit H04 and H04 -L02 with 1000' Radius Around Production Section LADL39190---31, Confidential C 2943S. W. SK -i14 ADL384403 SEC 28, T3S. R15W, SM H12 SEC 27, T3S, R15W, SM SEC 26, T3S, R15W. SM H 12-LO6 H H 12-L05 Hansen 1 H -12-L H-1 2-L H -12-L H -12 -LO TD Hansen 1 A + Start of St 1 SEC 32. T3S, R15W. SEC 33, T3 , R15 M ,f SEC 34, T3S, R15W. SM Tv SEC 35. T3S, R15W, SM a H04 -L02 KOP ICP 1-104-1-02 Surface Location (NAD 27) Northing: 2,144,623.03', Easting 168,812,80' p 2173' FSL, 1552' FEL, Sec. 2, T4S, R15W SM Surface Casing Point t Northing: 2,145,687.06', Easting 165,349.46' SEC 4, T4S, R15W, SM 3,143' FSL, 5,044' FEL, Sec. 2, T4S, R15W SM Kick Off Point Northing: 2,149,089.34', Easting: 155,462.09' 987' FSL, 4458' FEL, Sec. 33, T3S, R15W SM Total Depth Northing: 2,149,933.44', Easting: 154,213.31' 1796' FSL, 447' FEL, Sec. 32, T3S, R15W SM Cosmopolitan Unit Development Date Company 26/09/2018 BlueCrest Energy SEC 36, 1 ADL18790 SEC 3, T4S, R15W, SM S 4S. SEC 1; T 0 1000 2000 3000 4000 5000ftUS 1:30000 PETREL i M Domestic Mail Only, UI- --------- P' s+:'' x CM For delivery information, visit our website at www.usps.com,7. MU S EI Certified Mail Fee cc] $ M Extra Services K Fees (check box, add fee Return Receipt (hardcopy) $ W Return Receipt (electronic) $ A C3 Certified Mail Restricted Delimy $ Qc� H" C3 []Adult Signature Required $ C3 ❑ Adult Signature Restricted Delivery $ Bureau of Octhn Energy Management — Alaska Region Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. r"" 1L Domestic Mail Only For delivery information, visit our website at www.usps.com! M co Certified Mail Fee t I J Ir $ M Facts ge—rvices & -FiFe—s Tc�edkb_ox, —add fee ,spp�aq ate) Return Receipt (hardcopy) $ ruI I U 0 Astum Receipt (electronic) $ C3 [I Ceitified Mail Restricted Delivery $ C3 [3Aduft Signature Requimd $ - 4— C3 ❑ Adult Signature Restricted Delivery $ rn Postane Bureau of Ocitin Energy Management — Alaska Region Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. PS T�f instructiForm 3800, April 2015 PSN 7530- -000-9047 ons "M F= U For delivery information. visit our website at www.usps.comIi. I A M m c(3 Certrlwd Mad Fee C, .4 Ir Ir $rT1 ti fro Gaivic-s'-s & 'tew_-� "r herst I ow tipqvp�4,4)0 off. M f x0a, soerv, tom' W* WAI liar FAaw 4h�4fy I 0 neur, "bCov twdWini rU 0 Return Receipt (electronic) $ l" rU 0 Retum Receipt (electronic) A C3 [] Ceddied Mail Restricted Delivery $ t4we C3 $ C3 0 Certified Mail Restricted Delivery Her, 0 Adult Signature Required C3 C3 $ 0 Adult Signature Required $ E] Adult Signature Restricted Delivery $ C3 E] Adult Signature Restricted Delivery $ 7_1 iu r'I ; OS6�w I- 1 -0 A +1 Alaska Region Bureau of ocean Energy Management -- Alaska Region Bureau of Ocean Energy Management Office of Leasing and Plans Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. Anchorage, Alaska 99503. Form 3800, April 2015 PsN 7530 -02 -OW -9047 See Reverse for InstruCtion jr • 5-w j $ �04LF r4TA am 0, K 99 5 17 AN '110f, SE Y. --------- ----- Ir Ln Certified WWI Fee M ru Certified$ mail Fee Cr Extra Servl6e—s & rees (check box, add fee []Return Receipt (hardcopy} $ M tai wrf�;�VW�R— I G—W—Oftw* bw aw top it r►l M n C3 13 Return Recelpt (electronic) $ Postmark [I certified Mail Restricted Delivery I ru U C3 Here [I Adult Signature Required E:3 C3 Certified Mail Restricted DeDelivery 6 OwC3e Adult Signature Restricted Delivery $ C3 Adult Signature Required ❑ Adult Signature Restricted Delivery $ 1 .21 C3 Postage Bureau of OcMn Energy Management Alaska Region $7.41 Office of Leasing and Plans Bureau of Ocean Energy Management —Alaska Region 3801 Centerpoint Drive, Suite 500 Office of Leasing and Plans Anchorage, Alaska 99503. 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. 'PS Form 3800, April 2015 PSN 7530-02-000-9047 SOD Rei6rse 16-75—st—ru-777n's I For delivery information, visit our webSite at www.usps.comz,. X T I-V ANrV A N C M Lw M C(3 Certifted Mail Fee Sox. Certified maii Fee co ir $ 75!1 M fixt6 es F rvic & ees {check box, add fee M xtlt'rr ewes & WS kJw* WK. WW 00Return Receipt (hwtWpy) $ Pw ru 7 Return Receipt (electronic) $ l7, �:_ rU 0 Return Receipt (electronic) $ C3 POSI(ftwk [] CeAffied Mail Restricted Delivery $ C3 0 Ce?tir*d Mail Restricted Delivery $ C3 C3 C3 []Adult Signature Required $ M 0 Adult Signature Required $ Adult Signature Restricted Delivery $ 0 Adult Signature Restricted DaVery $ -11 1.---- -.11_ C3 Postage r 1 2 Bureau of Ocean Energy Management —Alaska Region Bureau of Ocean Energy Management — Alaska Region Office of Leasing and Plans Office of Leasing and Plans 3801 Centerpoint Drive, Suite 500 3801 Centerpoint Drive, Suite 500 Anchorage, Alaska 99503. Anchorage, Alaska 99503. L,:*40, —A !4VAoAIWWWIXWft 40'g U.S. Postal Service TM s.com$ CERTIFIED MAIL@ RECEIPT %n Domestic Mail Only $ I Fees f6heck box, add Me Tg te) Extra Servic'es fp X n Return Receipt (eleCtronIC) $ n _, 147N ANCjffJf- ACT '3 []Certified Mail Restricted Delivery $ n 0 $— 1 G 1-! 6 Postm ark El Certified Mail Restricted Delivery Certified Mail Fee 4 Here r $ adcffbey w.46 Alaska Department of Natural Resources -- Unit Secbion — Exta (Ch Services Fees eckboxy U ElerntuReceipt (hardcopy) $ i — _r 550 W 7th Ave, Suite 1100 3 El Return Receipt (electronic) $ Pusovvwrk 4- 3 11 Certified Mail Piestricted Delivery $ — W t ire 3 []Adult Signature Required $ I'l - []Adult Sigriattire Restricted Delivery $ J Postage 21 Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. - --- ------------ For delivery information. visit our website at www.usp• 'A h s.com$ Certified Mail Fee Jt -j $ I Fees f6heck box, add Me Tg te) Extra Servic'es fp X E] Return Receipt awdcopy)0" Return Receipt (eleCtronIC) $ 0 Set= Receipt tiardeopy) $ []Certified Mail Restricted Delivery $ El Return Receipt (electronic) $— 1 G 1-! 6 Postm ark El Certified Mail Restricted Delivery $ Here Adutt Signature Required $ i -f 17, 0 Adult Signature Restricted Deivery $ Alaska Department of Natural Resources -- Unit Secbion Postage Unit Manager Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. L 'IL - Certified Mail Fee '4 $ Extra ices & F-e—eS —(check box, add tab $ 0 Return Receipt (hardcopy) $ -1 rti 0 Retum Receipt (electronic) $ Postmark 3 Certified Mail Restricted Delivery $ K x Here 3 0 Adult Signature Required $ F] Adult Signature Restricted Delivery Alaska Department of Natural Resources Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. I r%-- Domestic Mail only M U1 For delivery information, visit syy website at www-usps.com". Ul M Certified Mail Fee cc �' w4 C51 Er $ M Extra Services & Fees (check Wx, add fee Return Receipt (hardcopy) $ W Retum Receipt {electronic) C3 E) Certified Me Restricted Delivery $ Here C3 0 Adult Signature Required $ 1-f 17i i I C3 []Adult. Signature Restricted Delivery $ L 1-2 Alaska Departrwat of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. Ln A N CrIV M Ceffied Mail Fee co MIr CReturn Receipt (electronic) L3 Certified mail Restricted Delivefy C3 D Adult Signature Required Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. Ln F7- N W M Certified Mail Fee -2 4f tc) E6 A;� Ir $ M11 AorogA ru $ Ro. 0 rl , Vmrk C3U $ $ LIJ C3 ElAdultSignature Restricted Delivery $ Postage C3 or 0 9 288/? f I I R Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-356o. Ln I HM M 4 c' M bm, add I" ru C3 C3 Adult Signature Required C3 Adult Signature Restricted Delivery $ Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 995013560. Certified Mail Fee $ I Fees f6heck box, add Me Tg te) Extra Servic'es fp E] Return Receipt awdcopy)0" Return Receipt (eleCtronIC) $ Postmark []Certified Mail Restricted Delivery $ Here 0 Adult Signaturo Required i". t-1 []Adult Signature Restricted DeRmy $ Alaska Department of Natural Resources -- Unit Secbion Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. L 'IL - Certified Mail Fee '4 $ Extra ices & F-e—eS —(check box, add tab $ 0 Return Receipt (hardcopy) $ -1 rti 0 Retum Receipt (electronic) $ Postmark 3 Certified Mail Restricted Delivery $ K x Here 3 0 Adult Signature Required $ F] Adult Signature Restricted Delivery Alaska Department of Natural Resources Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. I r%-- Domestic Mail only M U1 For delivery information, visit syy website at www-usps.com". Ul M Certified Mail Fee cc �' w4 C51 Er $ M Extra Services & Fees (check Wx, add fee Return Receipt (hardcopy) $ W Retum Receipt {electronic) C3 E) Certified Me Restricted Delivery $ Here C3 0 Adult Signature Required $ 1-f 17i i I C3 []Adult. Signature Restricted Delivery $ L 1-2 Alaska Departrwat of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. Ln A N CrIV M Ceffied Mail Fee co MIr CReturn Receipt (electronic) L3 Certified mail Restricted Delivefy C3 D Adult Signature Required Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-3560. Ln F7- N W M Certified Mail Fee -2 4f tc) E6 A;� Ir $ M11 AorogA ru $ Ro. 0 rl , Vmrk C3U $ $ LIJ C3 ElAdultSignature Restricted Delivery $ Postage C3 or 0 9 288/? f I I R Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 99501-356o. Ln I HM M 4 c' M bm, add I" ru C3 C3 Adult Signature Required C3 Adult Signature Restricted Delivery $ Alaska Department of Natural Resources — Units Section Division of Oil and Gas Unit Manager 550 W 7th Ave, Suite 1100 Anchorage, Alaska 995013560.