Buccaneer and Enstar sign new contract

Buccaneer Energy Ltd. has recently signed a firm contract to provide short-term natural gas supplies to Enstar Natural Gas Co. during the warmer months of this coming year.

Under the terms of the contract, the Australian independent will provide between 4.37 million and 5 million cubic feet per day to Enstar from March 20 to Sept. 30, 2013.

The contract is based on a set price of $6.80 per thousand cubic feet.

The companies said they are also currently negotiating a multi-year contract.

Under a previously negotiated contract, Buccaneer is already supplying Enstar with 5 million cubic feet per day at an annual weighted price of $6.19 per thousand cubic feet.

The initial Enstar contract was based on supplies from the Kenai Loop No. 1 well, which Buccaneer brought online in January 2012. The supplies for the new contract are coming from the Kenai Loop No. 4 well, which Buccaneer brought online in February 2013.

The onshore Kenai Loop field is currently producing about 10 million cubic feet per day, and is expected to increase to between 11 million and 11.5 million cubic feet per day in April, according to Buccaneer. The company said it is currently negotiating a contract with an unnamed third party to sell the additional supplies anticipated for the spring.

Additionally, Buccaneer has announced third party reserves estimates for Kenai Loop.

An analysis from Ralph E. Davis pegs the field at 22.3 billion cubic feet of proved developed reserves — 19.9 bcf in producing reserves and the rest in nonproducing reserves — which Buccaneer called a 98 percent increase over previous estimates.

Buccaneer said it is finalizing subsurface mapping from a previous seismic survey to allow Ralph E. Davis to estimate the proved undeveloped reserves at Kenai Loop.

—Eric Lidji