(MENAFN- ProactiveInvestors - Australia) Buccaneer Energy (ASX: BCC) has started producing gas at an initial rate of 2 million cubic feet per day from its Kenai Loop-4 well onshore Alaska.
Long-term deliverable production rate from Kenai Loop-4 is estimated to be 3-4 million cubic feet per day.
The Kenai Loop-1 well produces about 6.5MMcfd and the majority of the current 8.5MMcfd produced from the field is sold to local gas utility Enstar.
This is currently limited by the installed temporary production facilities with the permanent facilities expected to be completed by the end of April 30.
Once this is in place, production at the Kenai Loop field is expected to increase to between 10 million and 11 million cubic feet per day, or nearly double the average production achieved in 2012.
South-central Alaska is currently experiencing severe gas shortages and the winter peak pricing of incremental gas supply reached US$22 per thousand cubic feet.
Buccaneer has a minimum deliverability of 5.0 MMCFD to Enstar under its current gas sales agreement at an annual weighted price of US$6.24 thousand cubic feet with the remaining gas sold into winter peak pricing.
A new long term sales agreement is current being discussed with potential purchasers.
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