Buccaneer Energy Limited advise that production from its Kenai Loop # 1 well commenced on 14 January 2012 (US time).
The Company anticipates producing the well at up to 5.0 million cubic feet per day (“MMCFD”) for the first 2-3 months while reservoir performance is monitored. The Company will be selling gas into ENSTAR’s winter daily auction. The daily auction is a system where gas producers are advised of ENSTAR’s additional requirements for the next 24 hours and the producers bid the price and volume to sell gas to meet these requirements.
ENSTAR’s additional winter demand requirement during this period is primarily based on weather conditions and so can fluctuate on a daily basis.
The Company also has the ability to sell gas to ConocoPhillips under its gas sales agreement with the local LNG facility if the total daily production is not purchased by ENSTAR.