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West Eagle Unit Final Drilling Permits Issued

Buccaneer Energy Limited (“Buccaneer” or “the Company”) is pleased to advise that all outstanding approvals and permits have been granted, and the Company can now commence drilling operations on its 100% owned West Eagle Unit. The Unit consists of 8,843 acres with the expiry dates of an additional ~7,000 acres surrounding the new Unit being extended to 30 September 2014.

The outstanding approvals and permits that have been received are as follows:

    • A drilling permit from the Alaskan Oil and Gas Conservation Commission (“AOGCC”); and 
    • An oil spill plan (“C-Plan”) amendment from the Alaska Department of Environmental Conservation (“ADEC”).

Under the Plan of Exploration for the West Eagle Unit approved by the Alaska Department of Natural Resources (“DNR”), Buccaneer had committed to drill and test the West Eagle Unit # 1 well by 1 September 2013.

Given the C-Plan had not yet been received from ADEC, the DNR issued a Notice of Default and Cure that extends the date by which the West Eagle # 1 well needs to be spudded until 1 December 2013.

The Company plans to commence drilling operations on the West Eagle Unit # 1 well upon completion of the Kenai Loop # 1-4 well using the Glacier drilling rig currently on location at Kenai Loop. The West Eagle well is estimated to spud in mid October 2013.

All upgrades to the access road and drilling pad have been completed. A conductor pipe has been drivenand the water well drilled, so operations are ready to commence once the Glacier drilling rig is moved from the Kenai Loop location.

Bonding

In accordance with the Plan of Exploration for the West Eagle Unit, the Company lodged US$1.2 million in performance bonds with the DNR in early August 2013.

As the West Eagle # 1 well did not spud and drill to the objective depth by 1 September 2013, the DNR claimed that the Company should forgo these bonds. The Company appealed this decision and was successful in getting that decision reversed. Upon spudding the West Eagle # 1 well, US$600,000 of the bond will be released to Buccaneer, and the remaining US$600,000 upon reaching target depth.

West Eagle # 1 well location

The primary objective of the West Eagle # 1 well targets a 150’ Upper Tyonek interval of sandstones that had gas shows in a down-dip offset well, the Standard Oil of California, Anchor River # 1. Up-structure on a northeast to southwest trending ridge, the West Eagle well will test a large amplitude anomaly mapped on 233 miles of 2D seismic data. The anomaly size is estimated at more than 4,000 acres.

The West Eagle # 1 well will also test a deeper, large stratigraphic pinch-out which is part of what is often called the East Side Oil Play, made up of basal Tertiary or older potential reservoirs up-dip from a postulated middle Jurassic oil source conduit system. This deeper objective is also amplitude supported.

Yours faithfully, 
Mr. Dean Gallegos
Executive Chairman
BUCCANEER ENERGY LIMITED

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