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Buccaneer brings Kenai Loop No. 4 online
Buccaneer Energy Ltd. is expecting a bump in Kenai Loop production this quarter.
The increase would come from a second well the Australian independent recently brought online at the onshore gas field near the city of Kenai, and from the increased capacity of permanent production facilities that the company expects to be operational by late April.
Buccaneer started Kenai Loop production in January 2012 with the Kenai Loop No. 1 well and brought the Kenai Loop No. 4 well online on Feb. 10. The well is currently producing at 2 million cubic feet per day, but Buccaneer expects production to increase to between 3 million and 4 million cubic feet per day under the permanent facilities.
Weather delay While Buccaneer began installing the facilities and associated pipelines back in November, it said “severe weather conditions” forced it to suspend work in December.
With Kenai Loop No. 1 now producing some 6.5 million cubic feet per day, Buccaneer believes the field could produce between 10 million and 11 million cubic feet per day.
The majority of the 8.5 million cubic feet per day currently in production is going to Enstar Natural Gas Co., according to Buccaneer. While Buccaneer is currently contracted to provide a minimum of 5 million cubic feet per day to Enstar at an average weighted price of $6.24 per thousand cubic feet, the company said that winter peak pricing of incremental gas supply has hit $22.00 per thousand cubic feet within the past 60 days.
While continuing to utilize the winter spot market for the time being, Buccaneer also said it is negotiating “a new long term gas sales agreement with potential purchasers.”
—Eric Lidji
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