Buccaneer Reports Log Results from Kenai Well

- Buccaneer Reports Log Results from Kenai Well

Thursday, June 16, 2011
Buccaneer Energy Ltd.

Buccaneer provided the following additional results from a technical review of the logs and data from its 100% owned Kenai Loop # 1 well.

Highlights

• A technical review of logs how the well intersected 26 separate gas zones rather than 16;
• Total gross pay increased to 645' from 510' in the Beluga and Upper Tyonek Formations;
• Kenai Loop # 1 well log and testing data compared to analogous wells from the Cannery Loop field further underpins confidence in long term production rate;

A technical review of the logs from the Kenai Loop # 1 well has been completed and the results indicate that 26 separate gas zones were intersected while drilling; this is an increase from the 16 zones originally announced. Total gross pay increased from 510' to 645'.
The original planned drilling depth was anticipated to be 10,500'; this was subsequently increased to 10,640' as more gas zones were intersected. Logs indicate that additional gas zones were being intersected when drilling ceased.

Reservoir Data

A flow test over 4 different choke sizes, a 4 point test, was successfully completed on 2 zones (of the 26 intersected) totaling 60' of gross perforated pay out of 87' in gross pay in the two zones, an Absolute Open Flow Potential (AOFP) was calculated as 33.2 million cubic feet per day (MMCFD) from this testing.

The high AOFP demonstrates the excellent permeability and porosity of the 2 zones perforated and tested. The permeability and reservoir pressures are comparable to the Cannery Loop # 1 (CL #1) and Cannery Loop # 4 (CL #4) wells, both of which produced from the comparable Upper Tyonek sands tested in the Kenai Loop # 1 well.

There were 11 wells in total in the Cannery Loop field that produced a total of 178 BCF (~22 MMBOE).

The Company's initial assumptions are that Kenai Loop # 1 will deliver a long term deliverable production rate of 6 - 8 MMCFD (750 - 1000 BOEPD) over an initial 2 years, with approximately 10 BCF being ultimately recoverable from the 2 zones tested. ).

The additional 24 zones that remain untested would be incremental.

Kenai Loop # 1 Previous Results

In the initial phase of the testing program, the Kenai Loop # 1 was successfully tested, flowing gas to the surface at a rate of 10.0 million cubic feet per day on a 20/64" choke with a FTP (flowing tubing pressure) of 3,495 psi.

The Company has up to 26 zones totalling 645' of gross pay identified by logs as test candidates in the Beluga and Upper Tyonek Formations. As the rig needed to be released back to Marathon on 1 June 2011, 2 of the 3 high graded zones in the Upper Tyonek Formation were chosen to be perforated and tested.

The 2 zones total 87' of gross pay were described as follows:

• Zone 1 has an upper sand of 37' of gross pay which logs have confirmed as being quality reservoir with high porosity and good permeability. This upper sand package had a "gas kick" during drilling operations. There is an additional 12' of lower sand which is a lesser quality sand, but remains attractive. Only the upper portion of this zone is included in the testing program.
• Zone 2 is an additional massive sandstone zone of approximately 50' of gross pay which logs indicate has good porosity and permeability.

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