Buccaneer Energy Limited updated on the analysis of the 3D seismic survey of the Kenai Loop project.
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 3 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 which have been encountered and are being produced in the Company's 100% owned Kenai Loop project.
The Company has completed a preliminary evaluation of the 23.4 square mile 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) Reserves of 31.5 Bcf and Proven and Probable (2P) Reserves of 38.3 Bcf to the Kenai Loop project, attributed an aerial extent of 340 acres around the Kenai Loop # 1 well. 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 i.e. a total of up to 1,680 acres.
Additionally, the Company has identified 11 new seismic hydrocarbon anomalies from stacked pays in the shallow Sterling and deeper Tyonek formations.
In the past month the Company has had three separate data processing companies (different software packages) to enhance the overall interpretation and to reduce risk. The final phase of the 3D seismic processing is underway, as fluid substitution and thickness modelling of the Tyonek zones that were logged and tested in the first Kenai Loop well drilled in 2011 is being applied to the 3D interpretation to high-grade the drilling opportunities.
The Company will risk assess each of these anomalies including a third party peer review prior to finalising a future drilling program.
As advised previously all permits and clearances to commence drilling operations at the Kenai Loop project are in-place. The Glacier # 1 drilling rig is on location at the Kenai Loop # 1 drilling pad ready to commence operations for the next well. If the final selected bottom-hole location of that well is more than 500' from the existing permitted location an application will be lodged for an amendment, if this is required it will result in a delay of approximately 5 days.
Consequently the Kenai Loop #4 well is expected to spud in early August from Drilling Pad # 1. The well has a targeted true vertical depth (TVD) of 11,000 feet and is anticipated to take 35-40 days to drill, with an additional 10 days of testing planned.
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