A purchase and sale agreement for the two main productive leases in the former Cosmopolitan Unit from Pioneer Natural Resources Alaska Inc. was signed by Buccaneer Energy Ltd. and BlueCrest Energy II.
Buccaneer, with a 25% working interest, will be the operator. BlueCrest will have the remaining 75% interest.
Cosmopolitan is an undeveloped oil and gas field located in 50 ft of water in the Cook Inlet of Alaska and is in close proximity to the shoreline at Anchor Point on the Kenai Peninsula.
Settlement of the acquisition is due on March 30, 2012, with the commercial terms of the transaction remaining confidential.
“The acquisition of our interest in the Cosmo project provides substantial benefits for the company. Not only does it significantly increase Buccaneer’s oil and gas reserves, but it also increases operational utilization and revenue performance of the Endeavour jackup rig,” said Buccaneer director Dean Gallegos.
As part of the due diligence on Cosmo, Buccaneer and BlueCrest engaged Ralph E Davis to conduct an independent reserve estimate on the project. The 2P reserves of Cosmo increase Buccaneer’s independently assessed Alaskan 2P reserves from 17.5 million barrels of oil equivalent (MMboe) to 31.3 MMboe, an increase of 79%.
The field will be developed in two phases. The shallow-gas development at 3,000 to 4,000 ft will be drilled with the jackup and tied back to onshore facilities. An offshore well will be drilled in 2012 to quantify both zones.
The deeper oil development (6,000 to 8,000 ft) will be drilled directionally from an onshore location.
Development will begin in winter 2012 and 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.
Separately, offshore gas wells will be drilled and tied back to the existing onshore site, which will be connected to Enstar’s recently completed gas transportation line.
The Cosmo project is in the southern part of the Cook Inlet, which is free of ice flows during winter.
