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Buccaneer planning Kenai well in 2011
Buccaneer Alaska is permitting three drilling locations at its Kenai Loop project and could begin drilling as early as February, the company announced on Dec. 17.
Kenai Loop sits on a non-contiguous patch of onshore leases north and northeast of the Cannery Loop unit owned and operated by Marathon Oil, and the city of Kenai.
Buccaneer, the local subsidiary of an Australian independent, believes the field holds “multiple stacked pay zone possibilities between 5,000 and 10,000 feet” based on control wells, 200 miles of 2-D seismic and the geology of surrounding fields. The company placed in-house reserve estimates for the field between 35 billion and 78 billion cubic feet with initial production rates between 5 million and 10 million cubic feet per day per well.
Acreage held by Buccaneer Buccaneer began chasing the leases in the prospect this past summer, and now holds 100 percent working interest and 80 to 86.5 percent net revenue interest in some 7,734 acres of State of Alaska, Cook Inlet Region Inc. and Alaska Mental Health Land Trust leases.
The company described the first well proposed for the program as a step-out from Cannery Loop expected to spud in late February, depending on rig availability. The first well will most likely be on Mental Health Trust acreage, because earlier this year Buccaneer committed to drill on Trust acreage in 2011 in return for a 3,427-acre lease.
The field is tucked into a crowded section of the Kenai Peninsula, surrounded by four legacy fields operated by Marathon: Cannery Loop and Kenai to the south, Sterling to the east and Beaver Creek to the northeast. The nearest sales pipeline is about three miles away. Nikiski, home of a liquefied natural gas export terminal, is just up the coast. And the proposed natural gas storage operation planned at Cannery Loop is to the south.
Buccaneer estimated the well would cost about $7 million to drill and complete, and said it expects to be able to recover about $4.5 million of that in ACES tax credits.
Buccaneer has been exceptionally busy since arriving in Alaska in March. The company is pursuing five prospects, including Kenai Loop, and continues to amass acreage in the Cook Inlet with each passing lease sale. Buccaneer has not yet drilled a well in Alaska.
—Eric Lidji
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