Sydney, Australia (BUSINESS WIRE) - Australian company Buccaneer Energy Limited (ASX:BCC) today announced its second successful well at its Pompano Project located 11 kilometres off the coast in the Gulf of Mexico, Texas in 55 feet of water.
ASX-listed Buccaneer Energy Limited ("Buccaneer" or "the Company") announced today that the second well in the Pompano field was successfully tested in two gas-productive sands totalling 74 feet (22.4 metres) of net gas pay found in the well. Buccaneer has a 65% working interest in the well.
This is a dual completion well, allowing for two sand intervals to be produced simultaneously. The well's Operator, AnaTexas Offshore, plans to put the well into production in the next 10 days.
"These two sands are expected to produce at a combined rate of 7 million cubic feet per day plus 30 barrels of high quality condensate," says Director Mr Dean Gallegos. "We're pleased to report that the level of production surpasses our expectations of 6.0 million cubic feet per day."
Notably, the pressure reading from the E Sand was estimated to be a 4,820 psi bottom hole pressure (BHP), which the Operator advises is a near-virgin pressure. With the pre-drill estimate of 2,500 psi BHP, it is evident that the E Sand has repressurised since it was last drilled in 1982. According to the Operator, this increased BHP in the E Sand will have a positive impact on recoverable reserves.
This successful well follows on from the Pompano # 1 well that was drilled in January 2008 and was put into production in mid March 2008 at the rate of 7 million cubic feet per day. As a result of the strong market for gas in the United States, it is anticipated that the two wells will generate net revenue of US$1.3 to US$1.5 million per month for Buccaneer at the current gas price.
Corporate overheads are running at approximately US$250,000 per month meaning the Company will be profitable, the Company has a current market capitalization of approximately A$37.0 million "We choose the Pompano project as our first because the infrastructure is already was already in place,"
Mr Gallegos stated, "The project has two off-shore platforms and sales pipelines and this has saved us approximately US$15 million in development costs and 6-9 months of time and the benefits of having this infrastructure in place are now bearing fruit.""Buccaneer has a 65% working interest in the Pompano project including these first two wells, which is relatively a high level compared to other companies in similar arrangements.
This means all successful wells that are drilled at the project have a bottom line financial impact for our shareholders. We believe that if it is a development project and the risk is relatively low compared to an exploratory project then the working interest should be higher." stated Mr Gallegos.
"Going forward there are at least another four other drilling locations at the Pompano Project, Buccaneer hopes to drill at least two of these this calendar year. All of the wells we will drill at Pompano will have at least 2P (proven and possible) reserves associated with them, therefore we have a high degree of confidence that we will be successful in a high percentage of future wells at the project.
According to Mr Gallegos, Buccaneer's strong management team is one of the key reasons for the Company's prime position within this industry.
"Our management team is 100% based in the US in Houston, Texas," Mr Gallegos stated, "Combined they have around 175 man years of experience in the oil and gas industry both locally and internationally. By being physically located in the US they have the ability to monitor the current opportunities and acquire the ones that conform to Buccaneer's requirements in a timely fashion."
Pompano Project - Background
The Pompano gas field lies offshore in the Gulf of Mexico, in Brazos Block 446-L SE/4, which is approximately 90 miles southwest of Houston, Texas. The field is approximately 11 kilometres offshore in 55 feet of water.
The Pompano gas field was discovered in 1966 and produced over 120 billion cubic feet of gas prior to being shut-in in 2003. The Pompano Project is essentially a re-development of the Pompano gas field with new well locations based on modern 3D seismic data.
Well #1 was directionally drilled in January 2008 from the field's existing "B" satellite platform to 7,825 feet measured depth. Well #1 intersected three gas bearing sands located between 6,700 feet and 7,426 feet measured depth ("MD") which were successfully flow tested. Production commenced from this well in early March 2008 from the B and 6700 A sands.
Well #2 spudded in late February 2008 and was directionally drilled from the field's existing "A" Production Platform.
Well #2 encountered several gas bearing sands between 7,300 feet and 8,980 feet MD. The well has been completed using a dual string completion over the B and E sands so as to enable concurrent production of these two zones. It is expected Well #2 will be placed on production around the end of April 2008.
The Pompano Project is using the field's extensive existing production and pipeline facilities, which has achieved a significant capital cost saving and a reduction in time to production for the project.
About Buccaneer
Buccaneer Energy's wholly owned subsidiary Buccaneer Resources is based in Houston, Texas and is an upstream oil and gas company. It specialises in the development and expansion of behind-pipe proved and probable reserves and low-risk exploration plays with growth potential.
Buccaneer's growth strategy is focused on the progressive expansion of oil and gas production and reserves by acquiring significant working interests in low-cost, low-risk development properties that possess significant undeveloped upside.
Buccaneer Energy Limited
Dean Gallegos, 0416 220 007 or 02-9233 2520 Director
ASX-listed Buccaneer Energy Limited ("Buccaneer" or "the Company") announced today that the second well in the Pompano field was successfully tested in two gas-productive sands totalling 74 feet (22.4 metres) of net gas pay found in the well. Buccaneer has a 65% working interest in the well.
This is a dual completion well, allowing for two sand intervals to be produced simultaneously. The well's Operator, AnaTexas Offshore, plans to put the well into production in the next 10 days.
"These two sands are expected to produce at a combined rate of 7 million cubic feet per day plus 30 barrels of high quality condensate," says Director Mr Dean Gallegos. "We're pleased to report that the level of production surpasses our expectations of 6.0 million cubic feet per day."
Notably, the pressure reading from the E Sand was estimated to be a 4,820 psi bottom hole pressure (BHP), which the Operator advises is a near-virgin pressure. With the pre-drill estimate of 2,500 psi BHP, it is evident that the E Sand has repressurised since it was last drilled in 1982. According to the Operator, this increased BHP in the E Sand will have a positive impact on recoverable reserves.
This successful well follows on from the Pompano # 1 well that was drilled in January 2008 and was put into production in mid March 2008 at the rate of 7 million cubic feet per day. As a result of the strong market for gas in the United States, it is anticipated that the two wells will generate net revenue of US$1.3 to US$1.5 million per month for Buccaneer at the current gas price.
Corporate overheads are running at approximately US$250,000 per month meaning the Company will be profitable, the Company has a current market capitalization of approximately A$37.0 million "We choose the Pompano project as our first because the infrastructure is already was already in place,"
Mr Gallegos stated, "The project has two off-shore platforms and sales pipelines and this has saved us approximately US$15 million in development costs and 6-9 months of time and the benefits of having this infrastructure in place are now bearing fruit.""Buccaneer has a 65% working interest in the Pompano project including these first two wells, which is relatively a high level compared to other companies in similar arrangements.
This means all successful wells that are drilled at the project have a bottom line financial impact for our shareholders. We believe that if it is a development project and the risk is relatively low compared to an exploratory project then the working interest should be higher." stated Mr Gallegos.
"Going forward there are at least another four other drilling locations at the Pompano Project, Buccaneer hopes to drill at least two of these this calendar year. All of the wells we will drill at Pompano will have at least 2P (proven and possible) reserves associated with them, therefore we have a high degree of confidence that we will be successful in a high percentage of future wells at the project.
According to Mr Gallegos, Buccaneer's strong management team is one of the key reasons for the Company's prime position within this industry.
"Our management team is 100% based in the US in Houston, Texas," Mr Gallegos stated, "Combined they have around 175 man years of experience in the oil and gas industry both locally and internationally. By being physically located in the US they have the ability to monitor the current opportunities and acquire the ones that conform to Buccaneer's requirements in a timely fashion."
Pompano Project - Background
The Pompano gas field lies offshore in the Gulf of Mexico, in Brazos Block 446-L SE/4, which is approximately 90 miles southwest of Houston, Texas. The field is approximately 11 kilometres offshore in 55 feet of water.
The Pompano gas field was discovered in 1966 and produced over 120 billion cubic feet of gas prior to being shut-in in 2003. The Pompano Project is essentially a re-development of the Pompano gas field with new well locations based on modern 3D seismic data.
Well #1 was directionally drilled in January 2008 from the field's existing "B" satellite platform to 7,825 feet measured depth. Well #1 intersected three gas bearing sands located between 6,700 feet and 7,426 feet measured depth ("MD") which were successfully flow tested. Production commenced from this well in early March 2008 from the B and 6700 A sands.
Well #2 spudded in late February 2008 and was directionally drilled from the field's existing "A" Production Platform.
Well #2 encountered several gas bearing sands between 7,300 feet and 8,980 feet MD. The well has been completed using a dual string completion over the B and E sands so as to enable concurrent production of these two zones. It is expected Well #2 will be placed on production around the end of April 2008.
The Pompano Project is using the field's extensive existing production and pipeline facilities, which has achieved a significant capital cost saving and a reduction in time to production for the project.
About Buccaneer
Buccaneer Energy's wholly owned subsidiary Buccaneer Resources is based in Houston, Texas and is an upstream oil and gas company. It specialises in the development and expansion of behind-pipe proved and probable reserves and low-risk exploration plays with growth potential.
Buccaneer's growth strategy is focused on the progressive expansion of oil and gas production and reserves by acquiring significant working interests in low-cost, low-risk development properties that possess significant undeveloped upside.
Buccaneer Energy Limited
Dean Gallegos, 0416 220 007 or 02-9233 2520 Director
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