Buccaneer has received unanimous approval from the City of Kenai Planning and Zoning Commission for the Kenai Loop # 1 surface location.
This conditional use permit will also allow for all production facilities.
Plans to spud the Kenai Loop # 1 well can now be finalized. It is expected that the well will now spud in late March 2011.
The Company has acquired 100% working interest (80% to 86.5% net revenue interest) in approximately 7,734 acres from multiple landowners.
Features of the Kenai Loop Project are as follows:
- Lies on a ridge between the Kenai Cannery Loop field (175 BCF gas production) and Beaver Creek oil and gas field (6 million barrels oil and 205 BCF gas production);
- Seismic amplitude anomalies in the same productive intervals as the above fields;
- Several control wells and 200 miles of 2D seismic data were used to map Kenai Loop and, similar to the surrounding fields, there are multiple stacked pay zone possibilities between 5,000 and 10,000 feet;
- Resource potential per well is 5 BCF gas and the in-house estimated reserve range is between 35 - 78 BCF gas with most likely reserves of 52 BCF gas. Initial rates per well are estimated to be in the 5 to 10 million cubic feet per day range;
- Three drilling locations are in the process of being permitted;
- The first well will be a step-out well from the Kenai Cannery Loop field and is targeted to spud in late March, subject to confirmation of rig availability;
- 3 miles to the nearest gas sales pipeline;
- Drilling and completion costs are estimated at approximately $7.0 million gross and $2.5 million after the ACES cash rebate;
- Strong local market for gas in the area, recent gas contracts have a US $7.00 / MCF floor and US $10.00 / MCF ceiling.