ENSTAR Gas Contract Commences
Sydney, April 26, 2012 AEST (ABN Newswire) - Buccaneer Energy Limited (
ASX:BCC) is pleased to advise that ENSTAR has commenced injecting gas into the Cook Inlet Natural Gas Storage, Alaska (CINGSA) facility located immediately south of the Company's Kenai Loop project.
The Company is currently producing 5.1 million cubic feet per day ("MMCFD") from the Kenai Loop # 1 well on a 5/64" choke and is seeking to increase that production rate for delivery to ENSTAR in the short term. ENSTAR is currently injecting 100% of the gas it receives from the Kenai Loop # 1 well into CINGSA storage facility.
The Company's gas sales contract with ENSTAR entails the Company delivering a minimum of 5.0 MMCFD and a maximum of 15.0 MMCFD to ENSTAR, at an annual weighted average price of US$6.24 / MCF.
The Company has also extended its Gas Sales Agreement with ConocoPhillips to supply its LNG Facility in the event that ENSTAR experiences any mechanical issues during the CINGSA start-up period, meaning 100% of all gas produced from the Kenai Loop Project can be sold.
Each 5.0 MMCFD produces approximately $8.0 - $9.0 million per year in cash flow net to Buccaneer after royalties and operational expenses at the project level.
"Based on the economics of the Kenai Loop project and the continued development of CINGSA, we are looking forward to drilling more wells on the project as soon as we complete the acquisition of the Glacier #1 drilling rig from Marathon," said Dean Gallegos, Director, Buccaneer Energy. "Having the ability to sell increased volumes to ENSTAR, and any volumes during maintenance periods with ConocoPhillips, allows us the confidence to produce at the maximum efficient rate from the project,"
Contact
Buccaneer Energy Limited
T: +61-2-9233-2520
F: +61-2-9233-2530
WWW: www.buccenergy.com
| ||
|
