State orders BlueCrest to start Cosmopolitan gas production by March 2027

BlueCrest Energy has been in default on its Cosmopolitan unit lease in Cook Inlet since May 23, 2025. Alaska Department of Natural Resources Commissioner John Crowther has now ordered the company to restart rig preparation and submit a Plan of Development committing to a specific drilling date, with gas production to begin by March 31, 2027. The letter alone does not put gas into production. It demands the company show it can.

Crowther sent the letter Aug. 14. The department disclosed it Thursday in a Cook Inlet gas presentation to the Joint Resources Committee, delivered by Crowther and Division of Oil and Gas Director Haley Paine.

The letter requires four things: a restart of rig preparation activities, a Plan of Development showing rig readiness and a drilling date, assurance of financial capacity to carry out that 2026-27 plan, and an affirmation of financing status and timeline "for the benefit of the market and Alaskans."

The original cure terms required BlueCrest to show evidence of funding for the H10 well and the Tyonek gas project by Aug. 21, 2025, to file status updates every two months, and to give DNR a technical presentation by June 30, 2025. Oil production at the unit averaged 506 barrels per day in June 2026. What gas it yields comes incidental to those oil operations, not from the Tyonek gas project the state wants developed.

The pressure comes as Cook Inlet supply tightens. Annual demand runs about 70 billion cubic feet, split roughly into 10 Bcf for industrial users, 35 Bcf for natural gas utilities and 25 Bcf for electric utilities. Alaska News previously covered figures showing basin production fell to roughly 61 Bcf in 2025, down from 79 Bcf in 2016. The same presentation said Hilcorp completed 20 gas wells through August 2026 with plans for about seven more by December, and that HEX has a rig on-site at the Allegra Leigh platform to drill at least two wells this year.

At the Aug. 10 Alaska Senate majority press availability, covered earlier by Alaska News, Sen. Bill Wielechowski said the state needs "to hear from the Department of Natural Resources as to why they have let BlueCrest sit on those leases for a decade and not enforce the leases."

The presentation carries only the state's account. In a November 2024 plan of development filing, BlueCrest said it had "actively pursued the capital investment required to restart its onshore oil and gas drilling program and the offshore Tyonek gas drilling program." The company's response to the August letter is not part of the presentation.