|
Buccaneer delays Southern Cross; Endeavour to drill at Cosmo next
Looking to avoid getting caught in the fast approaching icy season, Buccaneer Energy Ltd. is postponing plans to drill a well at its offshore Southern Cross unit this year.
The Australian independent said that it recently moved its Endeavour jack-up drilling rig to Port Graham three weeks earlier than planned for “minor winterization work and annual hull inspections.” From Port Graham, the rig is scheduled to head back across Cook Inlet to drill the Cosmopolitan No. 2 well at the prospect off the coast of Anchor Point.
Buccaneer plans to return to Southern Cross when the next summer drilling season begins in mid-April 2014, but before the company can drill it must first negotiate extensions to the drilling commitments it will be missing by cancelling the program this year.
Those include a private farm-in agreement with Hilcorp Alaska LLC on two of the four leases at the unit. Buccaneer farmed-in the two leases in 2010 from Chevron Corp., which subsequently sold its Cook Inlet assets to Hilcorp. Among other commitments, the arrangement requires Buccaneer to drill a well on the leases to a depth of at least 8,500 feet. Buccaneer said it is currently in negotiations with Hilcorp to extend the agreement.
DNR must extend unit terms Buccaneer must also get the Alaska Department of Natural Resources to extend the terms of the Southern Cross unit agreement. The state placed the unit in default last year after Buccaneer failed to meet a prior work commitment. Buccaneer needed to drill by Oct. 31, 2013, to cure the default, but in his default notice Division of Oil and Gas Director Bill Barron said failure to meet the new deadline would not result in the termination of the unit, which was the penalty Buccaneer had initially proposed in its plan of exploration.
The reason, Barron wrote, was because the division had approved the unit based in large measure “on the exploration and development benefits of Buccaneer bringing a jack-up rig to Cook Inlet that would not only serve Buccaneer in drilling its prospects, but could also create a unique circumstance where the rig could be shared with other operators, thereby promoting exploration and development of other offshore Cook Inlet fields and providing increased potential for economic growth and employment opportunities.”
Buccaneer said negotiations with the state are under way.
Changed location After drilling at Cosmopolitan earlier this year, Buccaneer moved its Endeavour rig to Southern Cross and had already installed the 30-inch diverter and well control equipment on the conductor pipe when it noticed “some settling of the rig’s legs into the seabed.”
Subsequent tests found “scouring,” or evidence of sand movement around the legs of the rig. The company attributed this movement to strong currents, and chose an alternate drilling location some 450 feet southeast of the original location. While state regulators approved the change, Buccaneer subsequently decided it could not complete the well by the end of October, which is when the state typically ends the summer drilling season.
With work under way at Port Graham, Buccaneer said it expects to move the Endeavor rig to Cosmopolitan by late November. The company still needs final permits for that well.
—Eric Lidji
| 