BlueCrest Energy is drilling from the bottom up to reach oil offshore in Cook Inlet.
Benjamin Johnson, CEO of the small Texas-based independent, told members of the state House Resources Committee May 1 that the company has developed new long-range drilling techniques with lower costs to access the oil.
BlueCrest is developing the Cosmopolitan oil and gas field near Anchor Point on the southern Kenai Peninsula. The Cosmo field has long been known to hold significant resources but development of Cosmo has been a slow process. A prior owner drilled the first exploration well in 2001.
“We know for a fact that we have about half a billion barrels of oil in the ground in the field, but what we don’t know is how much of that oil we’re going to get out of the ground,” Johnson said to legislators.
The Cosmo oil reservoir is relatively shallow — down to about 7,000 feet — and about three miles offshore so drilling is being done from an onshore pad.
The long, angled wells have been drilled to upwards of 30,000 feet, according to Johnson, using what he often notes is currently the most powerful drill rig in Alaska.
BlueCrest began producing small amounts of oil from the original well in 2016 and since has drilled another 11 wells into the field, he said.
Company leaders initially planned to tap Cosmo with a series of wells drilled about 800 feet apart. Each of those wells were to be fractured once at the end to encourage oil to flow through the multiple layers of the reservoir and into the wellbore, which is a common practice to produce oil from thick, layered fields, Johnson said in an interview.
However, fracking is expensive and inexact, as it’s difficult to control the fractures at the end of the well.
That led the company’s drilling experts and consultants to theorize about new ways to drill into Cosmo by fully utilizing the capabilities of BlueCrest’s rig. Johnson said the drillers were very successful at steering the rig to drill pretty much wherever they wanted and it occurred to BlueCrest leaders that they could probably drill through the layers of the reservoir from underneath the oil.
The technique utilizes the now common practice of drilling multiple sidetrack wells off of a main wellbore; but those sidetrack wells are usually horizontal wells targeting a specific layer in a reservoir.
“We weren’t sure how it would work, how successful it would be but it turned out that it has been successful. We’ve got good wells and we were able to replicate it over and over,” he said.
The Cosmo field also has a significant natural gas cap above the oil. It’s believed developing the gas would require an offshore drilling platform.
The “fishbone” wells allow BlueCrest to punch numerous holes into Cosmo with fewer main wellbores and without fracking. By drilling up through the layers the company is “drilling the fractures,” Johnson described.
The technique provides the same penetration as if the wells were being drilled from the surface every 800 feet.
“To our knowledge we’ve never seen anybody drill vertically but we’ve been able to do it ourselves,” he said.
While company leaders and state regulators stressed the fracking company officials originally planned to conduct was environmentally safe, many residents of the area expressed concerns when BlueCrest was seeking drilling permits that it could impact marine life and possibly groundwater.
“The rock is very good; that’s the other thing that makes this work is our rock doesn’t cave in,” Johnson added. “Other places, if the rock is not consolidated enough the formation would cave in and that would be a problem.”
The fishbone wells have increased oil production at Cosmo from a few hundred barrels per day in 2016 to between 1,800 to 2,000 barrels per day now. Now BlueCrest leaders are looking to expand on the bottom up fishbone technique in up to 20 more wells by splitting the main well into three spines, each with its own fishbone ribs for what they are calling a “trident fishbone,” according to Johnson.
“It makes it faster, more efficient, less cost and it improves the economics to try to pay for these wells,” he said.
Over the next year Johnson said oil production could reach the 3,000 to 4,000 barrels per day range. BlueCrest is also likely to eventually add injection wells to maintain pressure in the oil reservoir.