Buccaneer Energy announced this week that it spud its second well in the Kenai Loop development field.
That well is considered a step-out well, meaning that it will explore out from the company's first well in the area near Walmart to see the extent of the natural gas field. It is being drilled from the same drill pad as the first well.
Buccaneer has said it expects to take 30 days to drill the well, and then spend 14 days testing it. This well will test similar depths as were tested in the first well, and also go deeper. The target depth is 11,000 feet.
In a statement announcing its progress, the company said that it expects the tests to show a significant increase in the producible gas.
Beginning in December, the company will likely sell gas to Enstar, assuming regulatory approval of the companies' agreement.
Buccaneer has also applied for a permit for its third well in the Kenai Loop exploration area. The well would require an exception from spacing requirements, as it would be within 3,000 feet of a well capable of producing from the same pool.
A hearing on that application is scheduled for Sept. 20, but will only be held if the Alaska Oil and Gas Conservation Commission has a request for the hearing by 4:30 p.m. Sept. 1. Public comment on the application will be taken until Sept. 19, or the end of the hearing - whichever comes later. The AOGCC will provide information on whether or not there is a hearing by Sept. 6.
The producer is ahead of the timeline it agreed to in a gas sales agreement with Enstar, which called for the second well to come online by November, and a third well the following November. Buccaneer has said that it could complete up to half a dozen wells within the next year, and have as many as 10 wells in the Kenai Loop area.
Buccaneer also has plans to bring a jack-up rig to the Cook Inlet. The rig is being purchased with support from the Alaska Industrial Development and Export Authority. The company plans to have it ready for the next open water season, which will begin in spring 2012. The purchase is expected to be finalized by the end of September.
Buccaneer representative Mark Landt said earlier this month that the company will first use the rig in Southern Cross leases north of Kenai.
The company also has onshore leases south of Kenai in the West Eagle unit. That area is northeast of Homer on the southern Peninsula. Company spokesman Dean Gallegos said Buccaneer plans to drill a well in that unit in 2012. That work will likely happen in the second half of 2012, after the company finishes seismic work in the area, Gallegos said.