Buccaneer Energy’s Kenai Loop #4 Well Commences Natural Gas Production
February 13 2013 - 11:00AM
Business Wire
Buccaneer Energy Limited (ASX: BCC) (“Buccaneer” or the
“Company”) is pleased to advise that production from its 100% owned
Kenai Loop #4 well commenced on Sunday, February 10, 2013. The
Kenai Loop #4 well is currently producing at an initial rate of 2.0
million cubic feet per day (“MMCFD”).
The long term deliverable production rate from the Kenai Loop #4
well is estimated to be 3.0 – 4.0 MMCFD. Kenai Loop #4 gas
production is in addition to the Company’s current production of
6.5 MMCFD from the Kenai Loop #1 well. The majority of the current
total production of 8.5 MMCFD (1,400 BOEPD) is being sold to the
local gas utility Enstar.
This production rate is currently limited by the installed
temporary production facilities. In November 2012, the Company
commenced the installation of permanent production facilities and
pipeline connections at Kenai Loop; however, severe weather
conditions meant that the build out of these was suspended in
December 2012.
It is expected that the permanent facilities will be completed
by April 30, 2013. Once permanent production facilities are in
place, it is anticipated that the Kenai Loop field’s total
production rate may be increased to 10.0 – 11.0 MMCFD (1,666 –
1,833 BOEPD). This represents a near 100% increase over the average
production rate achieved in 2012.
“We are very pleased that we were able to put this well into
service within 30 days after the successful flow test in
mid-January,” said Jim Watt, President, Buccaneer Alaska. “The
speed and efficiency our team displayed in going from discovery to
production with Kenai Loop #4 is a testament to our learned
experience and expertise working in the Alaska marketplace.”
Mr. Watt continued, “The continued success of the Kenai Loop
project is very important to the overall business plan of Buccaneer
Energy, and we plan to increase production from Kenai Loop #4,
dependent on local gas demand.”
Southcentral Alaska is currently experiencing severe gas
shortages and the winter peak pricing of incremental gas supply
reached US$22.00/MCF in the past 60 days. The Company has a minimum
deliverability of 5.0 MMCFD to Enstar under its current gas sales
agreement at an annual weighted price of US$6.24/MCF. Incremental
production above this level is being sold into the winter peak
pricing environment, while the Company negotiates a new long term
gas sales agreement with potential purchasers.
For further information on Buccaneer, please visit the Company’s
website at www.buccenergy.com.
About Buccaneer
Buccaneer Energy Limited is an Australian listed company focused
on developing its 100% owned oil & gas assets in Alaska. The
Company's flagship projects are a series of onshore and offshore
developmental and exploration prospects in Alaska’s Cook Inlet.
Buccaneer Energy has a 3 pronged cash flow strategy:
- Developing the 100% owned Kenai Loop
onshore gas project with independently assessed 6.4 MMBOE in 2P
Reserves;
- Operating an offshore jack-up rig for
use by third parties in the Cook Inlet; and
- Developing its 100% owned offshore Cook
Inlet projects that have independently assessed 88.4 MMBOE in 2P
Reserves / P50 Resources using the acquired jack-up rig.
Buccaneer Energy has a 50/50 joint venture with Singaporean
based Ezion, a leader in the development, ownership and chartering
of strategic offshore assets, and the Alaskan Industrial
Development and Export Authority (“AIDEA”). This joint venture has
acquired the jack-up rig “Endeavour” which is capable of drilling
in all areas of the Cook Inlet, the Beaufort Sea and the Chukchi
Sea. Mobilisation of the Endeavour into the Cook Inlet was
completed in late August 2012.
The Alaskan Government is supportive of oil and gas in the Cook
Inlet. There are a number of fiscal incentive programs for
exploration and development in the Cook Inlet.
Buccaneer Energy has drilled two producing onshore wells at
Kenai Loop, in Kenai Alaska. The field is currently expected to
produce between 10.0 – 11.0 MMCFD once permanent production
facilities are in place. Buccaneer plans up to three more wells to
be drilled at this location during 2013.
Buccaneer Energy also has major working interests in Texas and
the Gulf of Mexico, USA.
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