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Buccaneer touts Southern Cross unit reserves Following Northwest Cook Inlet estimates from November, Australian independent now releases information about Southern Cross Eric Lidji For Petroleum News
Fresh off getting approval to form two new Cook Inlet units, Buccaneer Alaska has released a new resource estimate for one of the offshore plays it hopes to drill.
The local subsidiary of an Australian independent believes the proved and unproved reserves at its Southern Cross unit could hold some 27.4 million barrels of oil equivalent, based on an analysis from the engineering firm Netherland, Sewell & Associates.
That figure refers to the proved and probable reserves, as well as a best resource estimate.
Only 6.3 million boe of the total is proved reserves, broken down into 4.6 million barrels of oil and 9.7 billion cubic feet of natural gas. The proved, probable and possible (3P) reserves total 24.1 million boe, which includes 19.5 million barrels of oil and 27.4 bcf of gas.
The analysis also determined that the resource potential of Southern Cross is 4.7 million boe in the low estimate and 44.3 million boe in the high estimate with a mean of 20.4 million boe.
In its December 2009 study of the Cook Inlet basin, the Alaska Division of Oil and Gas included the area north of Middle Ground Shoal among seven offshore plays with the potential for undiscovered fields, describing it as a “faulted anticline trend” with “potential reservoirs in the Beluga and Tyonek formations.” The Buccaneer report describes oil and gas potential in both the Tyonek and deeper Hemlock formation.
Developing the proved and probable (2P) reserves — 10 million barrels of oil and 16.5 bcf of gas — would cost $226 million in drilling and construction expenses, Buccaneer estimates. However, state tax credits would cover around half of that, Buccaneer said.
Exploration since 1960s Southern Cross, initially called North Middle Ground Shoal, is located northeast of the Chevron-operated Trading Bay unit in the state waters of upper Cook Inlet.
Buccaneer owns 100 percent working interest in all four leases in the unit.
Southern Cross dates back to wells drilled in the mid-1960s. The Pan Am A-1 well from 1964 flow tested at more than 3 million cubic feet per day of natural gas in the Lower Tyonek formation and also encountered oil shows in the deeper Hemlock formation.
In late November, Buccaneer released a report estimating that its other offshore play, the Northwest Cook Inlet unit, could contain some 46.7 million barrels of oil equivalent.
Buccaneer is in discussions with the Alaska Industrial Development and Export Authority and private investors to purchase a jack-up rig to drill those two prospects.
If Buccaneer can secure a rig and financing, it plans to drill its first wells at the Southern Cross and Northwest Cook Inlet units this summer. Under the new unit terms, Buccaneer must drill its first well at each unit no later than Sept. 30, 2012, or lose the units.
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