• Comment

Buccaneer pleased with results at Cosmo

Posted: August 14, 2013 - 12:35pm
Photo by McKibben Jackinsky, Homer News
Reports are positive for Buccaneer Energy’s Cosmopolitan No. 1 site near Stariski.

Buccaneer Energy CEO Curtis Burton says he is very pleased with results so far on the company’s Cosmo No. 1 exploration well in Cook Inlet, near Anchor Point.

One cloud on the horizon: The company is now concerned about where it might sell natural gas it has discovered, with Hilcorp Energy having sewed up much of the regional utility market into 2018, and the ConocoPhillips liquefied natural gas plant near Kenai still mothballed.

Hilcorp has recently signed gas supply contracts with three of the four major Southcentral utilities.

It’s unhealthy for a single producer to dominate a market, Burton said in an interview. There should be room in the market for all, “so no player gets cut out, particularly since the state has made such a heavy investment in spurring new exploration through incentives.”

From a practical standpoint, getting enough room for all means growing the market, most likely with industrial demand like a restarted Agrium Corp. fertilizer plant, resumed LNG production by ConocoPhillips, or use of clean-burning LNG as a transportation fuel, such as by the state ferries.

Those issues are a bit down the road for Buccaneer, and Burton is meanwhile pretty happy with how things are going now with the company’s exploration. Buccaneer has conducted a natural gas production test at the No. 1 exploration well in Cook Inlet, the company announced Aug. 5 in a press release. The well flowed at a test rate of 7.2-million-cubic-feet per day, with the gas flared at the site.

“We’re very encouraged by what we’ve seen from both the oil and gas. It is too early to declare the well commercial, but we can say it was a successful appraisal test and that we are encouraged by the results,” Burton said. “Continued testing and drilling are definitely warranted and we are examining all options for field development.”

State oil and gas officials agreed it was encouraging, and agreed caution is in order.

“This is a good rate, but a lot will depend on further testing,” said state oil and gas director Bill Barron.

Dan Seamount, a commissioner at the Alaska Oil and Gas Conservation Commission, said the geology of Cook Inlet is tricky and companies have been disappointed in the past after initial well results looked good.

Buccaneer tested a 73-foot section of gas-bearing sandstone at a 5,500-foot level. A second flow test of a 60-foot gas-bearing interval at the 4,400-foot level also is planned, the company said.

Burton said a flow test from sections of the reservoir with oil was not conducted because the jack-up rig being used lacked proper equipment to contain and dispose of the well. However, a number of oil samples were taken and data also is available from extended oil production tests done earlier by ARCO Alaska and Pioneer Natural Resources, previous owners of the leases.

Those produced 35,000 barrels of oil in extended production tests, Burton said, although they were done from a different part of the reservoir, Burton said.

Both gas zones tested are in the Tyonek formation where the drilling has indicated 488 feet of reservoir with multiple oil and gas targets. There also are deeper reservoirs, the Starichkof and Hemlock formations, where oil was found previously by ARCO and Pioneer.

Burton said he expects a “quick turnaround” on studies of commercial feasibility for gas given the test results, and that there should be a fairly quick study on oil production viability.

“We found a lot more oil than we had expected,” he said.

The Cosmo well is located in shallow water approximately three miles off the Kenai Peninsula and is being drilled with the Endeavour jack-up rig, which is owned by Buccaneer and partners Ezion Holdings of Singapore and the state of Alaska, through the Alaska Industrial Development and Export Authority.

Buccaneer and Fort Worth-based BlueCrest Energy are owners of the state leases at the Cosmo site, with BlueCrest owning 75 percent and Buccaneer 25 percent. Apache Corp., which also is active in Cook Inlet exploration, owns leases adjacent to tracts being explored by Buccaneer.

Buccaneer is U.S.-based but is listed on the Australian stock exchange.

When testing is completed at the Cosmo well Buccaneer plans to move the Endeavour to north Cook Inlet to drill two other offshore tests.

Burton said Buccaneer may be able to move the rig to its next prospect this month, but that uncertainties like weather could always complicate the schedule. The next well planned is at the Southern Cross prospect, in north Cook Inlet. If time permits the company also may begin a well at another prospect, North West Cook Inlet, which is near ConocoPhillips’ producing North Cook Inlet field.

Meanwhile, Buccaneer has an onshore Kenai Peninsula gas exploration and development program. A gas deposit was discovered right outside the city of Kenai, now Buccaneer’s Kenai Loop field. Two wells are producing gas and a third well is now being drilled.

Bucaneer also plans to drill an onshore exploration well east of Homer, its West Eagle prospect.

It hasn’t always been smooth going for Buccaneer. The company is small and relatively new, and has a huge amount of its financial and human resources invested in the Cook Inlet venture.

There has been a lot of innovation, such as finding a larger jack-up rig capable of deeper water and a wide range of Cook Inlet prospects. A rig was located in Southeast Asia but it needed upgrading. To do that, Buccaneer brought in partners in the rig, Ezion and the state of Alaska through AIDEA, the state development corporation.

The rig was upgraded and brought to Cook Inlet but some of the work that should have been done at a shipyard in Singapore had not been done by the drilling contractor. The contractor was terminated, with a resulting lawsuit, but Buccaneer meanwhile had to finish the rig work last winter in Homer, which added costs and delays.

Then a financial backer for the company dropped out, leaving Buccaneer struggling to pay bills. There were delays of payment of suppliers, Burton admits, but people were patient. “We’ve been able to pay everyone,” he said.

Tim Bradner is a reporter for the Alaska Journal of Commerce.

 

 

Buccaneer announces latest Cosmo results

Buccaneer Energy Limited announced last week the results of its latest gas well test for the Cosmopolitan No. 1 site off Stariski Creek and Anchor Point. The well successfully tested gas at a maximum rate of 7.2 million-cubic-feet per day on a 30/64-inch choke with a flowing tubing pressure of 1,318 pounds per square inch and no water, Buccaneer said in a press release.

Buccaneer said that the jack-up drill rig Endeavour-Spirit of Independence drilled a well in which a 73-foot section of the sand at approximately 5,500-feet depth (MD) was perforated and flow tested.

A four-point test was carried out to estimate the absolute open-flow potential of the reservoir. Once the pressure data is recovered from down-hole testing equipment and the absolute open-flow finalized, Buccaneer will announce the results. The Endeavour also is preparing to test a second gas zone at 4,300-feet depth with a 60-foot interval of perforations.

 

  • Comment

Latest Updates

Spotted

Please Note: You may have disabled JavaScript and/or CSS. Although this news content will be accessible, certain functionality is unavailable.

Skip to News

« back

next »

  • title http://spotted.homernews.com/galleries/317873/ http://spotted.homernews.com/galleries/317838/ http://spotted.homernews.com/galleries/317823/
  • title http://spotted.homernews.com/galleries/317818/ http://spotted.homernews.com/galleries/317813/ http://spotted.homernews.com/galleries/317758/
  • title http://spotted.homernews.com/galleries/317273/ http://spotted.homernews.com/galleries/316563/
Oscar Day at School!

CONTACT US

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS