Buccaneer reports Kenai Loop increase

Buccaneer Energy Ltd. is reporting a 20 percent increase in Kenai Loop production.

The onshore field north of the city of Kenai is currently producing some 6 million cubic feet per day, up from a previous rate of 5 mmcf per day, according to the company.

Buccaneer increased production at the field by opening the choke on the Kenai Loop No. 1 well — the only producing well at the field — to 9/64 inches, up from 5/64 inches.

The additional volumes will fulfill the terms of a new gas sales agreement between Buccaneer and an unnamed third party. Under the contract, Buccaneer will sell 1 mmcf per day from Oct. 15 to Dec. 15 at $7.50 per thousand cubic feet, net pipeline tariffs.

Considering the absence of any filings with the Regulatory Commission of Alaska, it can be assumed the new contract is not with a major regulated electric or natural gas utility.

Following this term, Buccaneer intends to keep producing at the higher rate and selling the additional volumes to Enstar Natural Gas Co. under its existing gas sales agreement.

Buccaneer said it would consider increasing production even further after completing the Kenai Loop No. 4 well, which the company spud in mid-September. As of Oct. 24, Buccaneer said the well was at a depth of 12,050 feet to its target depth of 13,000 feet.

So far, the Kenai Loop No. 4 well has encountered the two main productive sands from the Kenai Loop No. 1 well (at 9,700 and 10,000 feet, respectively), but at depths around 600 feet deeper than the earlier well (at 10,294 and 10,617 feet, respectively), according to the company. Kenai Loop No. 4 has also encountered at least four additional sands Buccaneer called “likely test targets” — two above and two below the productive sands.

—Eric Lidji