Good news continues to flow from Cook Inlet, where the offshore drilling rig the state helped finance is 2-for-2 so far in efforts to find natural gas.
The results of the first test, at a depth of 5,500 feet, produced enough gas to have Buccaneer's chief executive, Curtis Burton, publicly wondering to whom it will one day sell those hydrocarbons. A few days later, Buccaneer announced that a second test, drilled at 4,300 feet, also flowed at high volumes.
The test results, if they hold up to third-party analysis, could be a welcome sign for Southcentral utilities that only months ago wondered if the Cook Inlet could produce enough gas to meet the growing demand. That cloud appears to have temporarily lifted -- thanks to Inlet newcomer Hilcorp. The discovery of more gas could be icing on the cake for rate-payers in the state's most populated region.
"The takeaway is the well is successful. We found oil and we found significant quantities of natural gas," said Buccaneer spokesman Richard Loomis.
He cautioned that Buccaneer, based in Sydney, Australia, planned to drill a second well this winter at Cosmopolitan No. 1, and eventually a third well, to better understand how much gas the field could commercially produce. Also, a third-party must assess the results of the recent gas production tests and the positive flow rates, he said.
"It's early, but this is a very strong indication the field is going to be successful," meaning profitable over the long-run for Buccaneer, Loomis said.
Announcements of big finds in Cook Inlet are nothing new, and Alaskans have been let down before. Escopeta Oil Company (now Furie Oil and Gas Company) announced in late 2011 it had found 3.5 trillion cubic feet of natural gas. At the time, state officials said they doubted the size of Escopeta's find. The discovery was later downgraded to 750 billion cubic feet.
So how much stock should be put into Buccaneer's announcements?
Cathy Foerster, a commissioner with Alaska Oil and Gas Conservation Commission, said she couldn't legally address that question.
Buccaneer has provided the commission with a lot of information about what it has found while asking the commission to keep the data confidential.
Because the information is related to an exploratory well, the commissioners must do exactly that, she said.
But she pointed out that Buccaneer, a publicly traded company on the Australian stock exchange, must meet reporting and disclosure requirements required by securities regulators. Furie, a privately owned company, is not subject to those same requirements.
For its next move, Buccaneer plans to move the $127 million Endeavour-Spirit of Independence jack-up rig north to central Cook Inlet to drill a test well in the Southern Cross Unit. The rig was purchased and refurbished with help from the state-owned Alaska Industrial Development and Export Authority, which provided a $24 million loan.
Contact Alex DeMarban at alex(at)alaskadispatch.com