Buccaneer still eyeing Archer’s jack up rig work

• Endeavour jack up rig might start drilling this spring
By Naomi Klouda
Homer Tribune

Buccaneer Alaska hopes to salvage the season with spring drilling at the Cosmopolitan Unit, but first has U.S. Coast Guard inspections and a C-Plan approval before it can set to drilling.
In the latest update on status from the Australian oil and gas concern, President James Watt told a Kenai group last week he wants to aim for a March or April drilling date.
Speaking to the oil industry’s Alliance in Kenai, Watt blamed the rig’s delay on unforeseen issues with the work that simply was “not adequate,” from Archer.
Spokesman Jay Morakis, issuing the update on Monday, said currently Spartan Offshore is assessing the jack up rig Endeavour and itemizing any needed work remaining to be done. Buccaneer and its contractor Archer Drilling severed ties in December. Archer filed a lawsuit in a Texas Court alleging $6 million in unpaid bills and expenses incurred by Archer on behalf of Buccaneer. Buccaneer disputes the charges and hired Spartan Offshore to take over.
“What’s happening right now with the changeover from Archer to Spartan is they are inspecting all the work done by the Archer crew to see what is left to do prior to going to the U.S. Coast Guard for approval,” Morakis said. “Prior to their departure, Archer said there was minimal work. We know there’s more work, the question is how much to take it up to the highest operational standards.”
No target date for completing this is set yet. At the same time, the Department of Natural Resources is reviewing the C-Plan, which needs to be approved before any drilling at Cosmo. This outlines what would be done in case of an oil or gas spill in Cook Inlet to clean it up or cap a blown well. A public announcement will be made when these two processes are complete, he said.
“With the Land Use Permit, we can move to the Cosmo Unit and drop the legs but nothing else.”
The two remaining permits, one from DNR and one from the Alaska Oil and Gas Conservation Commission, are needed prior to any spring drilling.
“We just finished the second round of public comment on the C-Plan. Buccaneer has received those comments and responded and is now awaiting DNR to hopefully approve the C-plan. They are reviewing our response to the comments. There’s no hold up anywhere else,” Morakis said.
Buccaneer, long rumored to be suffering financial difficulties, also gained a cash infusion through a combination of equity stock offerings and new investors. The total raised is approximately $20 million, Morakis said.
As for vendors in Homer who worked on the Endeavour last fall and had not been paid by Archer or Buccaneer, Morakis said the company is still moving through the process.
“There are still loose ends on the finances – there is no update on that as of yet. They are still working through that,” he said.
Homer Port and Harbor, charging various fees for dockage, wharfage and moorage, has received regular payments, said Harbormaster Bryan Hawkins. In fact, the harbor has already shown double the revenue it projected for the deepwater dock, at $278,269 collected so far.

A spot on the horizon
Buccaneer considers its Kenai Loop wells a bright spot on the Alaska horizon. A fourth well was recently successfully tested at capable of producing 4 million cubic feet of natural gas per day. The field’s total production rate is 10-11 million cubic feet per day, which is already in delivery to Enstar and two smaller non-utility Cook Inlet companies, Buccaneer Director Dean Gallagos announced in a news release to investors. No. 4 well should be in production soon. Getting the gas to the market could take anywhere from 30-45 days, provided AOGCC works with Buccaneer. If the AOGCC approves the production plan it could be earlier. If not then it take the full 30-45 days.
Gallagos noted Southcentral Alaska is currently experiencing severe gas shortages and the winter peak pricing of incremental gas supply has reached $22 per metric cubic food. “This high pricing range is weather and supply related and could remain in place while winter heating conditions persist; the additional gas available from Kenai Loop field is capable of being sold into this spot market,” he said.
“This can feed natural gas to the market almost immediately. We should be able to provide to the markets 10 million cubic feet of gas a day,” Morakis added “That’s why we want to get to Cosmo is because it has significant gas flows. Once we’re able to get the rig to Cosmo, that’s more significant gas to get to market as well.”
Buccaneer grew leery of giving estimates on its time to move away from the Homer dock. “We have to wait to see how much work is left to do on the Endeavour. Once we know, and subsequently complete that work, we will move to U.S. Coast Guard inspections and the rig will depart once we are certified,” Morakis said. .
Watt is also advocating for a one-stop shop for obtaining permits. Gov. Sean Parnell introduced a bill in the Alaska Legislature asking for a beginning of this kind of streamlining.
“If you could have a plan of operations that was good for an area instead of having one for every well that you had to drill, it would help augment the activity that I think Southcentral Alaska needs to increase oil and gas production.”

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Posted by on Jan 23rd, 2013 and filed under Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

5 Responses for “Buccaneer still eyeing Archer’s jack up rig work”

  1. archer workers says:

    it seems this rig is a piece of crapola which will never be in any condition to drill, wake up and stop writing everything from Buccaneer’s point of view.

    From Archer workers:
    “well the truth has finally came out you had better check with the harbor master to see if the check has hit the bank. bucanneer energy doesnt have the money to make payroll let alone dock fees. the people of alaska had better check into where there millons of dollars went to in this shell game ponzy scheme. thanks buccaneer for the wonderful pink slip for xmas so dont sell your b.s economic stimulas plan and your b.s supposedly state of the art rig.. oh by the way state of the art rigs have flush toilets. this rig is so old and out of date they wont even drill with it in the sewer water off the coast of good old vietnam. 23 years of drilling experience 12 in alaska and I have never seen anything this run down whos going to pay the bill when it topples into the cook inlet with 35 men spewing crude oil.. ALASKA UNEMPLOYMENT INSURANCE..the games up bucaneer. you come to alaska selling snake oil you had better have the money to buy water to put in the bottles.. ”

    “oh buccaneer arent you something thanks for the xmas present… fire archer drilling why.. for footing the bills for YOUR RIG YES BUCCANEER YOUR RIG… NOT ARCHER DRILLINGS RIG….and they got sick and tied of doing it. to the tune of $12000000 dollars so lie some more this is just like asrc and peak for your pipeline you are side stepping the $$$ bullet there too..ohh did you mention in your lies about the $50000000 dollar loan you pulled to keep your sinking ship afloat. no of course not but the money is coming a little later than you planned so lets string everybody along hoping for the miracle..just like you strung the venders along in singapore for millions just ask national oilwell varco was it there rig no it wasnt.. so dont pin the tail on the donkey pin it on your own asses.this shell game continues and the sad part is that the state off alaska is allowing it to continue..after 23 years drilling 12 in alaska i cant for the life of me understand why they would allow a fly by night australian company with a rig that was in the scrap yard oh im sorry major constuction riiight drill in the cook inlet and get the state to pay your sorry a$#%@ to do it.. so are you going to fire the state for not paying to clean up the oil in the inlet…. “

  2. not sure says:

    “Southcentral Alaska is currently experiencing severe gas shortages and the winter peak pricing of incremental gas supply has reached $22 per metric cubic food. “This high pricing range is weather and supply related and could remain in place while winter heating conditions persist”

    Meanwhile, I read recently that Buccaneer sold their natural gas from Kenai to an undisclosed buyer at double the price.

    Asia is buying for double the cost. Intelligent people can put two and two together, so stop telling us we are running out, and stop expecting the state of Alaska to pay for infrastructure and give tax credits to corporations so they can make a killing selling our gas to Asia.

    The state really needs to look into drilling for and selling our own oil and gas. I am tired of this ridiculous abusive relationship, where the corporations beat us up, demand more and more and don’t even bother with common sense. It’s insulting. It’s their way, and they are never happy, it is never enough. What are we, a bunch of battered wives? We need to stand up for ourselves here.

  3. jumped the shark says:

    I would like to see more about Micciche in this paper, who suffers greatly from conflict of interest syndrome so common to politicians today.

    It was bad enough that Parnell ‘used’ to work for Connoco, this guy still does and his first order of business (from the ADN today)He is obviously overtly working for profit for Connoco shipping natural gas to Asia, and he doesn’t even see the conflict of interest.

    “We’ve got a supply issue and the public needs to understand it,” freshman Sen. Peter Micciche, R-Soldotna, told Department of Natural Resources Commissioner Dan Sullivan.

    For the public in Southcentral Alaska, the supply issue could mean that keeping their houses warm next year, or the year after, will require them to burn some natural gas from a place other than Cook Inlet.

    For Micciche, it could mean the plant at which he’s superintendent — the Conoco Phillips liquefied natural gas plant in Kenai — never exports gas again. The plant, the first of its kind in the United States, relies on a surplus of Alaska gas for shipment to Asia.”

  4. Common Sense says:

    Archer were paid to evaluate the rig condition and consult on the work required. I believe they then recommended their own contractors to do the work and sign it off…

    Buccaneer was out of it’s league the whole time in good faith with these guys and got taken for a ride all the way to Alaska… stop the bs now, the truth will come out in court…

  5. conflict of interest says:

    We have some serious conflict of interests with state government and natural gas- this government is not working for us, they are working for Conoco and can not be trusted.

    I don’t understand why this paper will not cover more about politics in the state? This is a huge disservice to the community to continue to support corporate lies and not even attempt to counter with the truth or dig deeper.

    Read Shannon Moore in the ADN for more “Legislators’ conflict-of-interest standards are a joke”

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