Thursday, January 19, 2012

Buccaneer Energy starts production at new Kenai natural gas well

By Tim Bradner
Alaska Journal of Commerce

Bucaneer Energy has started natural gas production at its Kenai Loop No. 1 well near Kenai, the company announced in a written release Monday. Production began Jan. 14.

The well will be produced at a rate of 5 million cubic feet per day for the next two to three months while performance of the reservoir is evaluated, company spokesman Dean Gallegos said.

Buccaneer, an Australia-based independent company, will sell its gas into the daily gas auction conducted by Enstar Natural Gas Co. and will also have the ability to sell gas to ConocoPhillips Alaska Inc. for that company’s gas liquefaction plant in Nikiski under a contract with ConocoPhillips, according to the press release.

Enstar’s daily gas auction “is a system where gas producers are advised of Enstar’s additional requirements for the next 24 hours and the producers bid the price and volume to sell gas to meet those requirements,” the press release said.

Buccaneer plans additional drilling in its Kenai Loop field beginning in the second quarter of 2012, the company said. The Kenai Loop No. 1 well was completed as a successful gas discovery in early 2011 but a second well drilled nearby was unsuccessful. Buccaneer planned additional seismic work this winter to better map the potential reservoir.

The additional drilling is planned to confirm other reserves.

Meanwhile, Buccaneer will be drilling offshore wells in Cook Inlet this summer with a new jack-up rig being brought to the Inlet by an affiliated company, Kenai Offshore Ventures. The company’s offshore prospects have potential for oil as well as natural gas.

There is already one jack-up rig in the Inlet brought north in 2011 by Escopeta Oil Co., a Houston-based independent. Escopeta partly drilled its first Inlet exploration well in late 2011 and discovered gas. Drilling was curtailed for the season with the onset of winter, and will resume next spring.

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