New gas-drilling project begins off Anchor Point

• Buccaneer’s plans include onshore drilling that shouldn’t impact sensitive fisheries
By Naomi Klouda
Homer Tribune

Graphic courtesy of Alaska Office of Oil and Gas - This map shows all current drillings in Lower Cook Inlet, including the one listed as Pioneer’s, now in Buccaneer Alaska ownership.

An offshore gas drilling operation will begin off Anchor Point this winter by Buccaneer Energy Limited.
The plan is that offshore gas wells will be drilled and tied back to the existing onshore site, to be connected to ENSTAR’s recently completed gas transportation line.
“The target is to drill an appraisal well this year, though no firm spud has been decided upon yet,” Jim Watt, President of Buccaneer Alaska, said Monday. “Production will follow after the development program is complete.”
Buccaneer signed a purchase and sale agreement to acquire the two main productive leases in the former Cosmopolitan Unit from Pioneer Natural Resources Alaska, Inc. Cosmo is described as an undeveloped oil and gas field located in 50 feet of water in Cook Inlet, close to the shoreline at Anchor Point. This unit is close to Buccaneer’s other Alaska assets and the plan is to use the capabilities of the Endeavour jackup rig there during the winter.
“Development of the Cosmo project involves two separate plans: A shallow gas development (3,000 – 4,000 feet) to be drilled with a jack-up rig; and a deeper oil development (6,000 – 8,000 feet) that can be exploited using directionally drilled wells from the shoreline,” a media release stated.
The acquisition is jointly owned with privately-owned Fort Worth, Texas based BlueCrest Energy II, LP. Buccaneer acquires a 25 percent working interest and BlueCrest has a 75 percent working interest, with Buccaneer to operate the project. Settlement is due on March 30, with the commercial terms of the transaction remaining confidential.
It will be a while yet before the jackup rig arrives, Watt said. An offshore well using the Endeavour jack-up rig is planned for late 2012. This will let the company gage the oil and gas zones of the project. “This represents the time period we expect to be drilling appraisal and development wells offshore,” Watt said.
Cook Inletkeeper’s Bob Shavelson has monitored the project since work began on the Cosmo Unit by ConocoPhillips.
“We originally had conversations with Conoco-Phillips when they were exploring. We strongly encouraged onshore development because of the halibut fishery and the sensitive environment there, and Conoco agreed,” Shavelson said.
The plan was for directional drilling from the bluff. When the project changed hands to Pioneer, they carried over a directional drilling plan.
“When pioneer assumed ownership they continued to explore from onshore and we strongly supported that because you don’t have the risk of a lot of infrastructure right in the middle of important fishing grounds,” Shavelson said. The infrastructure of an offshore facility would involve a berthing and transportation facility. This way, infrastructure can be kept onshore.
Buccaneer’s effort is expected to continue through to 2014. The preliminary development plan includes drilling and producing oil wells from the existing onshore production site and drilling offshore water injection wells for reservoir pressure maintenance.
The acquisition will allow the use of the Endeavour jack-up rig to provide a more efficient development plan than was previously available to Pioneer. Without access to a jack-up rig, all wells, including water injection wells, needed to be drilled as long reach directional wells from onshore, Watt explained in the release. The shallower gas reserves could only be reached by an offshore drilling using the transient Endeavour.
The Jack-Up rig is currently being upgraded at the Keppel Fells yard in Singapore. Once complete it will be moved to the Cook Inlet.  It is currently on schedule to arrive this summer, Watt said.
“Utilization of the Endeavour jack-up rig materially improves the economic parameters of the overall project,” he said. And Anchor Point area is considered more ideal for winter work than elsewhere in Cook Inlet, since it is usually free of ice flows in the winter.
Cosmo will provide a winter operational location for the Endeavour jack-up rig to use the rig when ice flows in the northern part of the Cook Inlet prevent drilling during the November – March period.
Does this mean Buccaneer no longer plans on wintering the jackup rig in the Homer Port and Harbor? “No decisions have been made as of yet and all options are being considered,” Watt said.
“This provides several years of winter drilling business and is expected to materially improve the profitability of the company’s offshore drilling division which was previously based on a 240 day drilling season.”
Buccaneer’s onshore Kenai well began producing natural gas last month.
“We currently plan to drill in the summer season at our Northwest Cook Inlet Project and our Southern cross project and then move the rig to work on the Cosmo field. This will be done concurrently with the current project onshore at Kenai, which began producing natural gas last month,” Watt said.