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State terminates West Eagle unit
The state has terminated the West Eagle unit.
The Alaska Department of Natural Resources terminated the Cook Inlet unit on request of operator Buccaneer Alaska LLC, which recently went through bankruptcy proceedings. The company had previously surrendered its leases in the West Eagle area.
Buccaneer formed the West Eagle unit in early 2013 to preserve its leases in the southern Kenai Peninsula, northeast of the Homer. The company requested a 46,395-acre unit over nine leases. The state approved an 8,843-acre lease over three leases and required the company to post two $600,000 performance bonds to backstop work commitments.
Using information from a reprocessed 2-D seismic survey shot in 1981, Buccaneer had intended for West Eagle No. 1 to target an Upper Tyonek interval where the Standard Oil Company of California had encountered gas in the early 1960s. The well was supposed to be the first in a series, with at least one of the future wells targeting a nearby oil play.
Was part of farm-out Toward the middle of 2013, the West Eagle prospect was included in a farm-out agreement between Buccaneer and a California-based independent, which was designed to give Buccaneer operating funds for a range of work. The deal ultimately fell through.
After considerable delay, including missed deadlines, Buccaneer started drilling West Eagle No. 1 in early 2014 but stopped at 3,700 feet, much shallower than intended.
Preliminary analysis “confirmed that the sands encountered exhibited excellent reservoir qualities,” according to the company, the lack of hydrocarbons “significantly increased the risks associated with the deeper objectives.” Within a month of announcing the dry hole, Buccaneer had hired Conway MacKenzie Inc. to help with financial restructuring.
In late May, Buccaneer filed for bankruptcy, which took much of the year to resolve. The company ultimate sold most of its assets to its largest creditor, AIX Energy LLC.
- Eric Lidji
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