Buccaneer Energy Limited has now received the final permit from the Alaskan Oil and Gas Conservation Commission (AOGCC) for the revised bottom-hole location for the Kenai Loop # 4.
The Company is in the process of finalizing the mobilization of drilling contractors and service providers to spud the Kenai Loop # 4 well with the Glacier # 1 rig that is currently on location at Drilling Pad # 1.
The Kenai Loop # 4 well is planned to drill deeper than the Kenai Loop # 1 (10,660 feet), and is anticipated to take 35-40 days to drill with an additional 10 days for testing. The Company will make a further release when the well has spud and thence weekly drilling updates.
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 billion cubic feet (30 million barrels of oil equivalent) and approximately 5 miles north of the Kenai Unit that has produced 2.4 trillion cubic feet (400 million barrels of oil equivalent). 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 percent 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 feet 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 feet sands in the Tyonek formations.
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 feet 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 feet sands that are currently being produced in Kenai Loop # 1 well and therefore the Company has a high level of confidence in this well location.
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 finalizing a future drilling program.
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