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Vol. 18, No. 20 Week of May 19, 2013
Providing coverage of Alaska and northern Canada's oil and gas industry

Spudding Cosmo

Buccaneer spuds first well, seeks more time to complete offshore programs

Eric Lidji

For Petroleum News

Buccaneer Energy Ltd. has spud a well at Cosmopolitan, but the company is asking the state for additional time to complete its larger work program at the Cook Inlet prospect.

A local subsidiary of the Australian independent started drilling the Cosmopolitan No. 1 exploration well off the coast of Anchor Point on May 13, according to the company.

Buccaneer is using its Endeavour jack-up rig to drill the well in some 80 feet of water. The company expects the 8,000-foot well to take approximately 45 days to drill.

Within the week before the announcement, a subsidiary of the company called Buccaneer Alaska Operation LLC asked the state for nearly three additional years to complete its two-well work commitment at Cosmopolitan.

The request asked the state Division of Oil and Gas to move the deadline for completing the two wells to April 15, 2016, from June 5, 2013. It also asked the state to modify the existing timetable to allow the company to drill the wells during the summer drilling season, as well as in winter.

Buccaneer said it needed the additional time to accommodate “project delays,” but in a timeline submitted to the state the company also appears to be seeking the flexibility to move its jack-up drilling rig between its numerous offshore prospects in the Cook Inlet basin.

Buccaneer intended to drill at Cosmopolitan last year, but was delayed when its Endeavour jack-up rig was docked in Homer for several months after arriving from Asia.

Development this year?

In its request, Buccaneer envisions using its Endeavour jack-up rig to complete the 8,000-foot Cosmopolitan No. 1 well by June, but from there its proposed timetable bifurcates.

Under one scenario, Buccaneer would move its rig north to drill and test the 16,000-foot Southern Cross No. 1 well by late September, and move it north again to drill the 8,000-foot Northwest Cook Inlet No. 1 well before the usual end of the upper Cook Inlet summer drilling season in late October. From there, Buccaneer would tow the rig to the south to drill the Cosmopolitan No. 2 well or to begin a winter development program.

Under the second scenario, Buccaneer would move the rig from Cosmopolitan No. 1 to Cosmopolitan No. 2 this summer and later continue on to the two northern prospects.

In both scenarios, Buccaneer imagines the possibility of a winter development at Cosmopolitan at the end of this year, presumably dependant on exploration results.

The filings include no mention of a recent deal where Buccaneer farmed-in the deep oil development rights at the ConocoPhillips-operated North Cook Inlet unit. In its announcement of the deal, Buccaneer said it expected to shuffle its upcoming workload.

1967 discovery

Cosmopolitan No. 1 is the most recent in a 55-year effort to development the prospect.

Pennzoil discovered an oil accumulation in the Starichkof sands of the Lower Tyonek at Cosmopolitan in 1967, reporting a 750-foot oil column with 24-27 degree API oil. An offset well to the northeast the same year appraised the formation and collected core samples, but Pennzoil ultimately decided against developing the field.

A ConocoPhillips predecessor subsequently acquired the acreage, and formed the Cosmopolitan unit in 2001.

The company drilled the Hansen No. 1 well up dip of the Starichkof State No. 1 in 2002, encountering oil in the Starichkof and Hemlock intervals, and drilled the Hansen 1A sidetrack in 2003. A 50-day flow test on the sidetrack averaged 550 barrels per day of oil. ConocoPhillips completed a 3-D seismic survey over the unit in 2005.

Pioneer acquired the prospect in 2007 and drilled the Hansen 1A-L1 in 2010. The well was a lateral off the 2003 sidetrack completed with fracture stimulation and the results led Pioneer to conclude that the Cosmopolitan reservoir was “lower quality than most other producing oil fields of the Upper Cook Inlet.” Still, a short pilot project to truck oil to Nikiski produced 33,504 cumulative barrels of oil. Pioneer eventually relinquished the prospect, saying that despite “encouraging” results from the workover and fracture stimulation, “subsequent flow test results and engineering studies indicated that the resource potential was not as large as originally estimated.”

Buccaneer acquired the prospect in early 2012 in partnership with the privately owned Fort Worth-based company BlueCrest Energy II LP. Buccaneer operates the leases and owns a 25 percent stake. BlueCrest owns 75 percent.

Buccaneer believes its jack-up rig improves the economics of Cosmopolitan by keeping the company from having to drill all wells, including injection wells, from the onshore pad. The prospect also gives Buccaneer the opportunity to use its rig in winter, when the offshore prospects in the upper Cook Inlet become too icy to explore.

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