Netherland, Sewell & Associates certifying engineers;
Reserves of 9.8 MMBOE Proven (1P) & 38.5 MMBOE Proven & Probable (2P);
Increases Company’s 1P Reserves by 51% and 2P Reserves by 117%;
Additional Contingent Resource of 10.3 MMBOE (1C) & 23.9 MMBOE (2C);
10 wells have successfully penetrated the oil formations;
Flow tested at rates up to 4,320 BOEPD (North Cook Inlet #B-02 well).
Buccaneer Energy Limited (“Buccaneer” or the “Company”) is pleased to advise that the preliminary Reserve and Resource estimates by Netherland, Sewell & Associates, Inc. (“NSAI”) have been delivered and are summarized below for the deep oil rights within the 23,368 acres of the North Cook Inlet Unit, in which the Company has a 100% working interest.
The Reserves estimates, 80% of which are oil, are based on 10 historical wells that successfully penetrated the oil formations and a 3D seismic survey. They were successfully flow tested at rates of up to 4,320 barrels of oil equivalent per day (“BOEPD”) (North Cook Inlet #B-02 well) or had logging results confirming the presence of productive oil. In addition to the 10 successful wells, an additional three wells were drilled which did not flow; each had oil shows, but were outside the oil fairway. A table outlining the 13 wells and the results of each is provided in Table 2.
The above Reserves increase the Company’s Proven Reserve (1P) base to 27.1 million barrels of oil equivalent (“MMBOE”) and its Proven & Probable (2P) to 71.4 MMBOE, a 54% and 117% respective increase. All Reserves have been certified by independent third-party engineers NSAI or Ralph E Davis, two highly respected US-based engineering firms.
In addition, NSAI has estimated the following Contingent Resources:
A full summary of the Reserves and Resources can be found in Table 1.
The oil is contained in the Lower Tyonek, Hemlock, Sunfish and West Foreland Formations. Drilling on the prospect began in 1962, and the formations have since been penetrated by the 13 wells outlined above; all of which were drilled within the North Cook Inlet Unit acreage, but were never placed on production. Seven of the wells were drilled in the 1990s; the others were drilled by various majors during the discovery and delineation phase of the Cook Inlet in the 1960s.
The North Cook Inlet Unit adjoins the Company’s existing North West Cook Inlet Unit where NSAI has previously provided a P50 resource estimate of 45.9 MMBOE which consists of 16.0 MMBO in oil pay zones that are contiguous to those in the North Cook Inlet Unit, and 185.0 BCF of gas in shallower gas horizons. The North West Cook Inlet Unit and North Cook Inlet Unit now have a total Resource (Contingent and Prospective) of 69.8 MMBOE.
On 6 May 2013, the Company announced that it had agreed to the division of the farm-in area into two acreage blocks, Block A and B, with a commitment to drill a well in each block. A well must be spudded in either Block A or Block B by December 31, 2014, and a second well in the remaining block by December 31, 2015.
The Company plans to spud a well in Block A to test the Hemlock Formation using the Endeavour jack-up rig in either the second or third quarter 2014. This well will be an offset to the ARCO North Forelands #1 well that was flow tested at 4,340 BOEPD from three formations (including the Hemlock) with oil testing at 43o API Gravity. The ARCO North Forelands #1 well was drilled in 1992 when oil averaged US$19.25 per barrel.
The well in Block B will be drilled as an offset to the Shell NCI #1 well that was flow tested at 2,270 BOPD from one Tyonek horizon. The Shell NCI #1 well was drilled in 1964 when oil averaged US$3.00 per barrel.
BUCCANEER ENERGY LIMITED
Mr Dean Gallegos