Buccaneer Energy - Kenai Loop # 4 Drilling Commenced
Buccaneer Energy Limited (“Buccaneer” or “the Company”) is pleased to advise that the Kenai Loop # 4 well spud on September 11, 2012 (US time).
The Kenai Loop # 4 well will target 7 stacked potential pay sands in the Tyonek formation and will have a bottom-hole location approximately 2,000’ north-west of the successful Kenai Loop # 1. All of the 7 stacked potential pay sands have been identified and mapped using data from the recent 3D seismic interpretation and all have hydrocarbon indicators.
The targeted pay sands within the Tyonek include the 9700’ and 10000’ sands that are currently producing 5.0 MMCFD on a 5/64” choke in the Kenai Loop # 1 well and therefore the Company has a high level of confidence in the Kenai Loop # 4 well location.
The Kenai Loop # 4 well is planned to drill deeper than the Kenai Loop # 1 (10,660’) , and is anticipated to take 35-40 days to drill with an additional 10 days for testing. The Company will give drilling progress reports each Wednesday and additional reports as required to meet its continuous disclosure obligations.
An additional 11 new seismic gas anomalies have been identified from the stacked pays in the shallow Sterling and deeper Tyonek formations, all of which have hydrocarbon indicators. The Company will risk assess each of these anomalies prior to finalising a future drilling program.
The Kenai Loop project consists of 9,308 acres and is immediately north and adjoins the lease boundary of the Cannery Loop field that has produced 180 BCF (30 MMBOE) and approximately 5 miles north of the Kenai Unit that has produced 2.4 TCF (400 MMBOE). The Cannery Loop and Kenai Unit were owned and operated by Marathon Oil Company and both share many of the same sand packages as that have been encountered and that are being produced in the Company’s 100% owned Kenai Loop project.
The Company has completed a preliminary evaluation of the 3D seismic over the entire Kenai Loop project area. The initial evaluation effort has focused on the producing 9,700’ and 10,000’ sands (Tyonek formation) around the existing Kenai Loop # 1 well. Ralph E Davis Associates, Inc., when estimating the Proven (1P) and Proven and Probable (2P) Reserves to the Kenai Loop project, attributed an aerial extent of 340 acres. The 3D seismic preliminary results indicates up to 840 acres around the Kenai Loop # 1 well bore in each of the producing 9,700’ and 10,000’ sands in the Tyonek formations.
Additionally the Company has identified 11 new seismic gas anomalies from the stacked pays in the shallow Sterling and deeper Tyonek formations, all of which have hydrocarbon indicators. The Company will risk assess each of these anomalies prior to finalising a future drilling program.
BUCCANEER ENERGY LIMITED
Mr Dean Gallegos
For further information please contact Dean Gallegos, Executive Director on 0416 220 007 or 02 9233 2520. Alternatively visit the Company’s website at www.buccenergy.com.
Buccaneer Energy Limited is an Australian listed company focused on developing its 100% owned oil & gas assets in Alaska. The Company's flagship projects are a series of onshore and offshore developmental and exploration prospects in Alaska’s Cook Inlet.
Buccaneer Energy has a 3 pronged cashflow strategy:
Developing the 100 % owned Kenai Loop onshore gas project with independently assessed 4.8 MMBOE1 in 2P Reserves;
Operating a Offshore Jack Up rig for use by third parties in the Cook Inlet; and
Developing its 100% owned offshore Cook Inlet projects that have independently assessed 73.3 MMBOE in 2P Reserves / P50 Resources using the acquired Jack Up rig.
Buccaneer Energy has a 50/50 joint venture with Singaporean based Ezion, a leader in the development, ownership and chartering of strategic offshore assets and the Alaskan Industrial Development and Export Authority ("AIDEA"). This joint venture has acquired the jack-up rig “Endeavour” which is capable of drilling in all areas of the Cook Inlet, the Beaufort Sea and the Chukchi Sea. Mobilisation of the Endeavour into the Cook Inlet was completed in late August 2012 .
The Alaskan Government is supportive of oil and gas in the Cook Inlet. There are a number of fiscal incentive programs for exploration and development in the Cook Inlet.
Buccaneer Energy has drilled the onshore Kenai Loop #1 well. The well was tested to have a flow rate of 6 – 8 mmcfd (750 - 1,000 BOEPD1) and the Company constructed both the pipeline and facilities at kenai Loop, the well
started production and selling gas in early January 2012. The Company plans to drill Kenai Loop #4 in 3Q 2012. Full development of the onshore Kenai Loop field could exceed 10 producing wells.
Buccaneer Energy also has major working interests in two producing projects in Texas, USA. Pompano is an offshore gas project located in the Gulf of Mexico, drilled by the Company in 2008 and has an additional pipeline of ‘drill-ready’ gas prospects. Lee County is an onshore oil project, currently producing a small amount of oil.
1 Using a Gas to Oil conversion ratio of 8:1
Level 9, 25 Bligh Street
SYDNEY NSW 2000, Australia T: +61 2 9233 2520 F: +61 2 9233 2530
ABN: 63 125 670 733
952 Echo Lane, Suite 420,
Houston, Texas 77024, USA T: +1713 468 1678 F: +1713 468 3717