As Buccaneer Alaska tries to bring a jack-up rig to Cook Inlet, the company is releasing its first resource report on one of the offshore plays it wants to drill.
The Northwest Cook Inlet play could contain some 46.7 million barrels of oil equivalent, according to a resource estimate by Netherland, Sewell and Associates Inc.
The report also includes a high estimate of 88.5 million boe and a low of 16.4 million boe.
Northwest Cook Inlet, as its name implies, sits in an arc along the northern boundary of the ConocoPhillips-operated North Cook Inlet unit, one of the stalwarts of the basin, having produced nearly 2 trillion cubic feet of natural gas over the past 40 years.
In late July, Buccaneer applied to form a unit over its six leases covering some 10,008 acres at Northwest Cook Inlet. In its unit application, Buccaneer told the State of Alaska that, using 2-D seismic and an analysis of existing wells on the structure, it had “identified a potentially commercial accumulation of hydrocarbons on the north and north west end of the North Cook Inlet structure” some three to six miles north of the Tyonek platform.
Buccaneer holds between 87.5 and 100 percent working interest in the leases.
State agrees with hypothesisBuccaneer believes Northwest Cook Inlet is a continuation of the North Cook Inlet field in the Sterling-Beluga formations and of the Tyonek Deep field in the Tyonek-Hemlock formations. The state agrees with that hypothesis. In a December 2009 study of the Cook Inlet basin, the Alaska Division of Oil and Gas listed seven offshore plays with the potential for undiscovered fields and included among them a “faulted structural nose” north of the North Cook Inlet field with “potential reservoirs in the Beluga and Tyonek formations.”
The new report attempts to measure that potential.
The resource estimate suggests this geologic extension presents the greatest potential in the Beluga formation, deeper than the source of most of the North Cook Inlet production in the Sterling sands around 6,000 feet deep. Buccaneer believes the Beluga formation “should be mostly or totally un-drained in the north-western portion of the structure.”
The resource estimate also suggests a deeper oil opportunity in the Lower Tyonek and Hemlock formations that would require a 14,000 foot exploration well to test.
Three prospectsThe resource estimate splits Northwest Cook Inlet into three prospects.
The report estimates that the Beluga prospect contains 172.5 billion cubic feet of natural gas, and no oil, with a high estimate of 339 bcf and a low estimate of 48.9 bcf.
It estimates that the Sunfire prospect contains 7.4 bcf of natural gas, with a high estimate of 13.8 bcf and a low estimate of 3 bcf. It also estimates oil potential at Sunfire around 7.8 million barrels with a high estimate of 14.6 million barrels and a low estimate of 3.1 million barrels.
Finally, it estimates the Tyonek Channel prospect contains 7.3 bcf of natural gas, with a high estimate of 12.3 bcf and a low estimate of 3.8 bcf. Tyonek also includes oil potential of 7.7 million barrels, with a high estimate of 13 million and a low estimate of 4 million.
Buccaneer, an Australian independent, arrived in Alaska in March 2010, buying up leases from fellow independent Stellar Oil and Gas, a sister company to Renaissance Alaska.
Permitting first Alaska wellBuccaneer plans to be very busy over the next two years.
The company hopes to drill at all five of its prospects in 2011 and 2012.
In its application for Northwest Cook Inlet, which the Division of Oil and Gas hasn’t yet ruled on, Buccaneer committed to drill its first well by Sept. 30, 2012. Buccaneer also committed to drill a well by the same date at Southern Cross, its other proposed offshore unit.
Those wells would require a jack-up rig, a mobile drilling unit well suited for the relatively shallow waters of Cook Inlet. Exploration companies have been trying unsuccessfully to get a jack-up rig to Alaska for nearly two decades, but Buccaneer believes it may have found a way using bonds and tax credits to buy the rig.
Escopeta Oil, an independent out of Houston, is also trying to bring a jack-up to Alaska.
North Sterling targets gasIn addition to its offshore ventures, Buccaneer is permitting a drilling program at the onshore North Sterling prospect, located just east and northeast of the Kenai Airport.
Buccaneer recently filed an Oil Discharge Prevention and Contingency Plan with the Alaska Department of Environmental Conservation for the drilling program. While the company plans to target natural gas, it said it could encounter oil while drilling.
The three-well program could start as soon as this winter from onshore ice pads and could continue on gravel pads in other seasons, according to a summary of the plan.
The proposed contingency plan is open for public notice through Dec. 12.
Buccaneer has not yet officially announced plans for its other two Alaska prospects — the onshore West Eagle prospect in the southern Kenai Peninsula east of Nikolaevsk, and the onshore West Nicolai Creek prospect on the west side of the Inlet — but on its website the company said it hopes to start permitting those programs in late 2011.