After drilling 3,700 feet and not hitting hydrocarbons, Buccaneer Energy Alaska will abandon its West Eagle No. 1 well about 20 miles east of Homer, the company announced Monday. 

Buccaneer began drilling the well at a gravel pit near Basargin Road off East End Road last month and could have drilled to 6,000 feet. Based on the drilling and other data, Buccaneer analysts said the sands encountered showed excellent reservoir qualities. However, not hitting hydrocarbons within 3,700 feet increased the risk of not finding oil or gas deeper in the well.

“Once we had passed the main objective, it became clear that the deeper targets would most likely return the same results,” said Curtis Burton, Buccaneer chief executive officer. “As a result we decided not to pursue those targets from this location.”

Burton said the dry hole did not condemn the prospects for the acreage in the area, and further study would be needed before another drill site is picked. Buccaneer plans no further development at West Eagle, he said.

West Eagle is located in an old gravel pit with existing road access, although Buccaneer did have to redo portions of East End Road to bring in its Glacier drilling rig. Burton said compared to the cost of other projects, West Eagle was relatively low. Buccanner didn’t have to build infrastructure and could use existing equipment.

In a press release, Buccaneer listed $9.44 million in costs associated with drilling at West Eagle, including $1.83 million to build the camp and roads and $3.4 million in drilling costs. 

Buccaneer said it could recover part of that money under drilling rebates from Alaska’s Clear and Equitable Share, or ACES, tax structure. Alaska’s new tax structure, Senate Bill 21, the Oil and Gas Production Act, took place Jan. 14, but it does not affect Cook Inlet oil and gas production. 

Buccaneer said the net cost of West Eagle after potential rebates would be $4.35 million. In comparison, Buccaneer has spent $9 million on its Cosmopolitan Unit in lower Cook Inlet off Stariski Creek. It has a 25-percent share in that project.

Burton said he was disappointed with the West Eagle drilling results, but noted it comes after successful drilling at its Kenai Loop field and the Cosmopolitan site.

“In the oil and gas business, dry holes are still a reality, and while we apply state-of-the-art technology and drilling and completions techniques to minimize that risk, it’s always a possibility,” Burton said.

Buccaneer will plug and abandon the West Eagle well and demobilize the project after that. The Glacier drilling rig will be moved back to the Kenai Loop field, said Jay Morakis, a Buccaneer spokesperson. He did not have a timetable for when that would happen or when the drilling camp would be taken down.

Alaska State Troopers are still investigating a fatal truck crash related to the West Eagle project. On Jan. 22, driver Travis Cunningham, 29, of Soldotna was killed when a drilling mud truck he drove went off the road and overturned near Mile 9.5 East End Road. No one else was involved in that crash. Cunningham was driving a truck for AIMM Technologies, a subcontractor to Buccaneer. 

Michael Armstrong can be reached at michael.armstrong@homernews.com.