AOGCC scheduling Kenai Loop hearings

The Alaska Oil and Gas Conservation Commission is scheduling a December hearing to resolve a correlative rights dispute at the Kenai Loop gas field in the Cook Inlet basin.

The three-day public hearing beginning Dec. 3 will allow anyone to comment on the ongoing drainage dispute at the field, including “any operator, owner or landowner.”

The commission began holding hearings on Kenai Loop in August 2013, when Cook Inlet Region Inc. objected to a permit application by field operator Buccaneer Energy Ltd. Since bringing Kenai Loop into production in early 2012, Buccaneer has only paid royalties to Alaska Mental Health Trust, which owns the surface rights at the drilling pad.

But the wells have since proven to be draining from surrounding leases, including those owned by CIRI and the state of Alaska. The parties have been unable to resolve the dispute, which is why the AOGCC has the obligation to order pooling and/or unitization.

The matter is complicated by the ongoing bankruptcy case of Buccaneer.

On Oct. 7, Buccaneer asked the court to schedule a sale and approve sale procedures, which, if approved, could move both cases closer toward a resolution.

- Eric Lidji