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Two wells at Cosmo Buccaneer planning to drill off Cape Starichkof, shoot 3-D seismic at West Eagle Eric Lidji For Petroleum News
Buccaneer Alaska is closing out the year with big plans at three prospects.
The local subsidiary of an Australian independent is permitting a two-well exploration program at the offshore Cosmopolitan unit, proposing a 3-D seismic shoot at the onshore West Eagle prospect and increasing production at the onshore Kenai Loop prospect.
At Cosmopolitan, just off the coast of Cape Starichkof, Buccaneer plans to explore for oil and natural gas, but said it may limit its target to natural gas at one of the two wells.
Using its Endeavour jack-up rig, Buccaneer would drill, test and complete the Cosmo No. 1 well between December and early February and the Cosmo No. 2 well through April.
The wells would both be on ADL 384403, the location of all the recent drilling at the prospect. A pair of previous wells drilled in the 1960s sits to the east and northeast.
The Division of Oil and Gas is taking comments on the project through Jan. 3.
Earlier this year, the state allowed Buccaneer to defer wells at its offshore Southern Cross and Northwest Cook Inlet units and focus on Cosmopolitan first. The company had originally planned to use its jack-up at all three prospects this year, but was forced to ask for an extension to its work commitments because the rig was delayed getting to Alaska.
1967 discovery Buccaneer is the fourth company to seek success at Cosmopolitan.
Pennzoil discovered the prospect in 1967, but did not develop it. ConocoPhillips formed the Cosmopolitan unit in 2001 and drilled the following year, but despite a 50-day flow test averaging 550 barrels per day of oil the company ultimately sold the prospect to Pioneer Natural Resources Alaska in 2005. Pioneer tried newer techniques on the productive interval and even conducted a unique pilot project to truck some Cosmopolitan oil to market, but dropped the prospect in early 2011. Despite “encouraging” results from a workover and fracture stimulation, it said, “subsequent flow test results and engineering studies indicated that the resource potential was not as large as originally estimated.”
Buccaneer believes its jack-up rig improves the economics of the project.
Using previous drilling, testing and seismic data, Buccaneer estimates Cosmopolitan contains some 31 million barrels of proved oil reserves. It also estimates the prospect could hold as much as 55.2 million barrels of oil equivalent of proved and probable reserves (broken down as 44 million barrels of oil and 90 billion cubic feet of gas).
West Eagle seismic Buccaneer is also proposing a 3-D seismic campaign at its West Eagle prospect.
The 61 square mile survey would cover an onshore area some 15 miles northeast of Homer using a cable-free recording system installed by helicopters in the road-free area.
The company plans to drill shot holes in December and record in February, and complete the survey in mid-March. The project involves around 80 people, through all phases.
The Division of Oil and Gas is taking comments on the project through Jan. 3.
West Eagle was among the original prospects Buccaneer acquired from Stellar Oil and Gas in March 2010, when it entered the Alaska market, but in the two and a half years since the company has focused on other prospects in its portfolio, particularly the onshore Kenai Loop field and the offshore Southern Cross and Northwest Cook Inlet units.
In 2011, Buccaneer acquired and reprocessed a 233-mile 2-D seismic survey over West Eagle. The seismic survey mapped a “large north-south trending gas prospective anomaly” in the northeast of the prospect, as well as potential oil and shallow gas leads.
All but one of the leases in the unit were set in expire on Sept. 30. Shortly before that date, Buccaneer applied to form the 46,395-acre West Eagle unit, telling the state it was “poised to drill,” but needed an assurance it would be able to keep its acreage.
In a proposed three-year plan of exploration, Buccaneer said it would drill an exploration well by Sept. 30, 2012 — a deadline that must be changed, if the unit were approved. The well would target a Tyonek interval identified in a well from the 1960s. By September 2014, Buccaneer would either a second well or shoot a 3-D seismic over some of the unit.
The state has yet to rule on the proposal.
Kenai Loop production For the second time in as many months, Buccaneer has increased gas production from its onshore Kenai Loop field to accommodate a short-term contract for small volumes.
The company is now producing 6.5 million cubic feet per day on average from the Kenai Loop No. 1 well, an increase of 500,000 cubic feet per day, or around 8 percent.
Through a recently executed gas sales agreement, Buccaneer said it would sell the additional 500,000 cubic feet per day to an unnamed third party in Cook Inlet. The contract runs through the end of the year, with a set price of $15 per thousand cubic feet, net of pipeline tariffs. Buccaneer suggested it might be able to extend the contract into 2013, or to expand the sales volumes, depending on the future needs of the buyer.
In October, Buccaneer executed a contract to sell 1 million cubic feet per day to an unnamed Cook Inlet third party at $7.50 per thousand cubic feet. As of Nov. 14, the buyer will pay $15 per thousand cubic feet, Buccaneer said. The contract ends Dec. 15.
Prior to the two short-term contracts, Buccaneer had been selling 5 million cubic feet per day to Enstar Natural Gas Co. through a previously executed contract. Once the two short-term contracts expire, Buccaneer plans to sell the additional volumes to Enstar using the daily auction pricing process established in recent years to meet peak demand.
Buccaneer expects the peak pricing to last through mid-February 2013.
Buccaneer is currently completing Kenai Loop No. 4, another well at the onshore field, north of the city of Kenai, and said the well might yield additional production increases.
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