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Work to resume at Cosmopolitan prospect

Posted: July 2, 2014 - 11:25am
The Endeavour jack-up rig may be put back to work later this year or spring 2015 after undergoing maintenance at Port Graham this summer. BlueCrest Energy of Fort Worth, Texas, intends to drill for oil from shore this summer and wants to use the Endeavour to drill for gas, both at the Cosmopolitan prospect near Anchor Point. The rig is show above at the Cosmo site in 2013.
  Homer News file photo
Homer News file photo
The Endeavour jack-up rig may be put back to work later this year or spring 2015 after undergoing maintenance at Port Graham this summer. BlueCrest Energy of Fort Worth, Texas, intends to drill for oil from shore this summer and wants to use the Endeavour to drill for gas, both at the Cosmopolitan prospect near Anchor Point. The rig is show above at the Cosmo site in 2013.

A drill rig likely will be starting work again later this year near Anchor Point. 

BlueCrest Energy Inc. plans to begin drilling at the offshore Cosmopolitan oil and gas discovery in Cook Inlet, company officials say.

Wells will be drilled from onshore, at high angles, to reach the Cosmopolitan deposit that is about 2.5 miles offshore. 

BlueCrest, based in Fort Worth, Texas, wants to begin a multi-year program to drill “extended-reach” production wells to tap a known oil deposit at Cosmopolitan, company president Benjamin Johnson said in an interview.

Meanwhile, the Endeavour jack-up rig will be coming back to Cosmopolitan, too.

BlueCrest will use the jack-up rig to drill vertical gas production wells into a shallow gas deposit that overlies the deeper oil reservoir, Johnson said.

The company would like to get the Endeavour drilling by late summer, but some extended maintenance work on the rig may delay that until next spring, he said.

“We would like to begin drilling with the Endeavour this summer, but it is unlikely to be available until later in the fall, which is too late to drill and complete wells in Cook Inlet,” due to the onset of winter weather, Johnson said.

“We’ll take it as soon as it is available, however.”

The rig is owned by Singapore-based Ezion Holdings and the Alaska Industrial Development and Export Authority, a state agency. It is now undergoing maintenance at Port Graham, south of Homer.

The Endeavour also was used in 2013 to drill at Cosmopolitan, where it confirmed the gas discovery.

At that time, Buccaneer Energy was the operator of the project. Buccaneer held a minority ownership in Cosmopolitan, with BlueCrest as the majority owner, but has since sold its 25 percent interest to BlueCrest. 

Buccaneer filed for Chapter 11 bankruptcy protection May 31 in Houston. The company previously had sold its interest in the Endeavor to Ezion and AIDEA as part of a financial restructuring.

Meanwhile, BlueCrest has filed a plan with the state Division of Oil and Gas outlining the new development plans, division spokeswoman Kathleen King said.

According to the plan, BlueCrest will use the jack-up rig to drill three gas wells to delineate the shallow gas discovery made in 2013.

The first well drilled with the Endeavour also would drill deep enough to gather reservoir data from the southern part of the oil deposit at Cosmopolitan, according to the plan. The well would then be cemented off and later would be used to produce gas from the shallow gas reservoir. 

Johnson said enough data is available on the northern part of oil reservoir to begin drilling the first production well later this year.

If oil is produced, it would initially be trucked to the Tesoro refinery at Nikiski.

“At this time, BlueCrest is currently evaluating alternatives for long-term transportation of oil from the onshore Cosmopolitan field location. At the initial start-up of the first few wells, the obvious short-term method will be trucking,” Johnson said in an email.

“The decision to implement a different transport method, such as a pipeline, will be a function of the productivity of the reservoirs and wells, combined with the experience gained from the initial trucking operations,” he said.

On natural gas, BlueCrest’s current plan is to produce from two offshore gas production platforms when a market is found for the gas, the plan said. 

Johnson said the two-platform plan is tentative and could change as more is learned about the reservoir.

Previous drilling at the discovery, including wells by previous owners ARCO Alaska and Pioneer Natural Resources, indicate the presence of 44 million barrels of proven and probable oil reserves and 96.6 billion cubic feet of proven and probable gas, according to estimates by Buccaneer, which operated the exploration program in 2013. A new estimate including the results of the 2013 drilling has not been released.

Cosmopolitan has a complex history. The discovery was first made in 1967 in early Cook Inlet drilling, but was not considered economic. ARCO acquired the prospect and drilled horizontal test wells from onshore in 2001 and 2003 and conducted production tests.

Technical problems in flowing the oil through the horizontal wells led ARCO to sell Cosmopolitan to Pioneer Natural Resources, which drilled its own horizontal oil production tests and also encountered problems with flowing the oil.

BlueCrest and Buccaneer acquired the property in 2012 and secured the Endeavour jack-up rig to drill vertical wells to test the gas prospect overlying the oil, and made the gas discovery.

Johnson said BlueCrest has studied the technical problems encountered by ARCO and Pioneer and has developed solutions. 

“Most of these were mechanical in nature and we believe we can solve them,” partly through the use of new technology, he said.

Tim Bradner is a reporter for the Alaska Journal of Commerce. 

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