Buccaneer executes two short-term GSAs

Buccaneer Energy Ltd. recently announced two short-term winter gas sales agreements.

The Australian independent will deliver up to 2 million cubic feet per day to an unnamed “large commercial end-user” for some five months starting in mid-November. The actual volumes “will be dictated by weather conditions,” suggesting it is for peak demand.

The second contract will provide back-up fuel to an un-named Cook Inlet oil producer “to ensure operation of their oil facilities in the Cook Inlet” during the winter. The contract contains no specific volume requirement and “deliveries will be dictated by the requirements of the customer,” according to Buccaneer. The major Cook Inlet oil producers include Cook Inlet Energy LLC, Hilcorp Alaska LLC and XTO Energy Inc.

Buccaneer said the gas prices in both contracts range from $6.80 to $7 per thousand cubic feet, which is “consistent with recent gas sales agreements,” according to the company.

The contracts come on top of the 9.5 million cubic feet per day Buccaneer is contractually obligated to deliver to Enstar Natural Gas Co. through various contracts.

Buccaneer is currently producing some 10 million cubic feet per day from two wells at the onshore Kenai Loop field, but believes it can increase production to as high as 12 million cubic feet per day if it can execute additional contracts in the coming months.

Having recently completed and tested a new well at Kenai Loop, Buccaneer is now moving its Glacier No. 1 rig to the onshore West Eagle unit northeast of Homer.

—Eric Lidji