Buccaneer to Acquire Transocean Jackup

- Buccaneer to Acquire Transocean Jackup

Thursday, September 01, 2011
Buccaneer Energy Ltd.

Buccaneer advised that its subsidiary Kenai Offshore Ventures, LLC ("KOV") has executed a binding Purchase Agreement with Transocean to acquire the GSF Adriatic XI offshore jackup rig ("Rig"). The total purchase price is US $68.5 million.

Settlement of the purchase is scheduled to take place between 30 September 2011 and 25 October 2011. Upon settlement, the Rig will immediately be transported to an Asian based shipyard to undergo modifications to enable operations in the Cook Inlet, Alaska. KOV is in the process of finalizing modification and mobilization budgets.

It is anticipated that the Rig will arrive in the Cook Inlet for the 2012 drilling season in April / May 2012.

Buccaneer anticipates contracting day to day operation of the Rig out to an established rig operator, additionally senior members of Buccaneer’s existing management team have direct jackup rig operating experience.

GSF Adriatic XI Jackup Rig

The GSF Adriatic XI jackup rig is a Marathon LeTourneau 116-C jackup rig. It was first constructed in 1982. The Rig was upgraded in 2004.

The Rig has been "cold-stacked" in Malaysia since September 2009 due to a lack of drilling commitments. KOV and its advisors have already completed two inspections of the Rig whilst cold stacked and consider the Rig to be in good condition.

Shipyard work to be undertaken in the second half of 2011 and early 2012 to the Rig include:

• Bringing the Rig back into operation after being cold-stacked;
• Improvements to the accommodation quarters; and
• Modifications to "winterize" the Rig for Alaskan conditions.

The work will not include any significant structural work.

The Company will give weekly drilling updates commencing Wednesday 7 September.

GSF Adriatic XI Capabilities

The GSF Adriatic XI jackup rig was selected through a global search process. Its existing capabilities make it suitable for most water depths that exist in the Cook Inlet and northern Alaskan waters.

These capabilities include:

• Operate in water depths up to 300 feet;
• Constructed of -10o Celsius rated steel allowing it to work safely in the wide environmental envelope that exists in the Arctic including the Chukchi and Beaufort Sea which are located offshore the North Slope;
• Two (2) sets of blow out protectors ("BOPs"), both 10,000 and 15,000 PSI, giving it capacity to drill high pressure horizons that exist in the Cook Inlet;
• Cantilever beam extensions that enhance its ability to work over existing platforms in the Cook Inlet to undertake drilling and repair operations; and
• Four (4) cranes and a high variable deck load rating of 8,300 KLBS which enable it to operate with extra equipment and materials onboard should support services be limited.

Initial Work Program

Buccaneer will have the first right of refusal with KOV to utilize the Rig until 31 December 2014 and Buccaneer will commit to drill a minimum of 4 wells in the Cook Inlet using the Rig.

The first well to be drilled by the Adriatic XI will be located on Buccaneer's 100% owned Southern Cross project where Netherland, Sewell & Associates have estimated Proven & Probable (2P) Reserve of 12.7 MMBOE and additional P50 Resource of 14.7 MMBOE.

The Southern Cross project is in approximately 50 feet of water with no unusual technical hurdles to drill and develop. Southern Cross is within 5 miles of four significant oil and gas fields with a combined production of 1.1 Billion BO and over 550 BCF of gas.

Buccaneer's initial test will offset several wells on its leasehold that tested oil and gas but were never produced. Buccaneer's first well is approximately 300 feet from the Pan Am 17595 # 3 (circa 1960's) which tested 230 feet oil and 1080 feet of mud cut oil from the Lower Tyonek and 165 feet of oil from the Hemlock.

It will also be structurally high to the Pan Am 17595 # 2 (circa 1960's) which tested the Lower Hemlock and recovered gas to the surface followed by fluid from which 990 feet of clean oil was recovered. Other wells on the lease tested gas from the Upper Tyonek. Buccaneer's well will be within the demonstrated hydrocarbon column for this area.

Financing

KOV anticipates that the total budget to acquire, modify and mobilize the Rig to the Cook Inlet will be approximately US $86.5 million.
KOV expects the funding to be sourced from:

• Kenai Offshore Ventures, LLC ("KOV") $6.85 MM
• Alaska Industrial Development and Export Authority (“AIDEA”) $24.0 - $30.0 MM
• Senior Debt Facility $50.0 - $56.0 MM

Buccaneer Energy owns a 50% direct interest in KOV with its 50% joint venture partner being Singaporean based Ezion Holdings Limited ("Ezion") with each funding an equal 50% of the required US $6.85 million deposit.

The Joint Ownership Agreement ("JOA") with AIDEA was executed with AIDEA on the 2 June 2011. Under the JOA, AIDEA will invest US $24.0 - US $30.0 million in the form of Preferred Interest in KOV subject to a series of conditions precedents ("CPs") being met.

In addition, KOV has separately received a credit approved term sheet from an Asian based international bank to provide a Senior Debt Facility of between US $50 – US $56 million. Final loan documentation is now in the process of being finalized.

KOV anticipates satisfaction of all CP's for both the Senior Debt Facility and AIDEA by late September 2011. The total amount of finance being sourced under the Senior Debt facility and AIDEA will not exceed in aggregate US $80.0 million. Further details of the financing terms will be announced upon the completion of the acquisition.

Commentary

Director of Buccaneer Energy, Dean Gallegos said, "This is another major milestone for Buccaneer.

"In order to drill the first well at its 100% owned Southern Cross Project in April/May 2012 a jackup rig was required. Since no suitable rig was available forming KOV and sourcing the funding has been a priority for the Company. Netherland, Sewell & Associates has estimated 73.3 MMBOE in combined 2P Reserves and P50 Resources to the Company's two offshore Cook Inlet projects.

"The acquisition of the Adriatic XI jackup rig begins the process of unlocking the substantial value in the Company’s offshore Alaskan projects.”

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Buccaneer to Commence Drilling 2nd Well at Kenai Loop

- Buccaneer to Commence Drilling 2nd Well at Kenai Loop

Thursday, August 18, 2011
Buccaneer Energy Ltd.

Buccaneer advised that it is on track to commence drilling of its second well at its 100% owned Kenai Loop project within the next 7 days.

The Company has contracted with Marathon Oil Company for the Glacier Drilling Rig # 1 to be on site for the second well at Kenai Loop, this being the same rig that successfully drilled KL # 1. The rig will mobilize to the location on August 22, 2011 (US time) with the well expecting to spud during that same week.

This second well will be a development well directionally drilled from the same drilling pad as KL # 1. The bottom hole location is expected to be approximately 1,800 feet from that of the KL # 1 well.

In May 2011 Buccaneer drilled the KL # 1 and intersected 26 separate gas pay zones. 2 of these zones were tested being the 9700' and 10000' sands. Due to restrictions on rig availability the Company was unable to test the remaining 24 identified pay zones.

The second Kenai Loop well will have the following primary objectives:

• a step out well to test and possibly extend the known aerial extent of the 9,700' and 10,000' sands;
• flow test additional pay zones (especially those at ~10,600') which were previously untested due to the then rig availability constraints;
• further define reservoir characteristics and reserve potential; and
• complete the well as a second producer in the Kenai Loop field.

The current independent assessment of 2P reserves at Kenai Loop of 38.3 BCF (4.8 MMBOE1) was based solely on the two tested pay zones in the 9,700' and 10,000' sands. The assessed 2P reserves covered an average of 340 acres of drainage area around the KL # 1 well. If the above objectives are successful, the 2P reserves are expected to increase.

The well is expected to take 30 days to reach its target depth of 11,000'. An additional 14 days of testing is anticipated.

Director of Buccaneer Energy, Dean Gallegos said, "The Company is very keen to take full advantage of the recently executed gas sales contract with ENSTAR, which allows for deliveries of up to 15.0 MMCFD.

"The sand in KL # 1 around the 10,600 feet depth look good on the logs and the second well will penetrate these sands in a slightly higher structural position than in KL # 1. These sands and the shallower 9700' and 10,000 foot sands are the most immediate way for us to increase booked reserves and future production capacity.

"In the last 12 months the Company has leased, technically assessed, permitted, execute a gas sales contract and drilled 2 wells. While there will always be delays due to unforeseen circumstances, I think this demonstrates management's capacity to deliver complex projects successfully."

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Buccaneer's Kenai Loop Reserves Exceed Expectations

- Buccaneer's Kenai Loop Reserves Exceed Expectations

Wednesday, July 20, 2011
Buccaneer Energy Ltd.

Buccaneer announced an initial Proven and Probable Reserve of 38.3 BCF (4.8 MMBOE) at 100% owned Kenai Loop. These booked Reserves substantially exceed the Company's pre drill assessment of approximately 5.0 – 10.0 BCF.

Ralph E. Davis completed an independent reserve assessment of the Kenai Loop project. Ralph E. Davis is a respected consulting firm providing independent reservoir engineering, geological, technical and financial services to the domestic and international energy industry since 1924.

	Proven (1P)	Proven & Probable (2P)	Proven & Probable & Possible (3P)
Gas - BCF	31.5	38.3	51.6
Oil Equivalent- MMBOE	3.9	4.8	6.5

The above Reserves were calculated using subsurface mapping, pressure and flow rates data attained from KL #1 well. The current Reserves include only two sand packages at 9,700 feet and 10,000 feet. An average drainage area of 340 acres was used to calculate the Reserves and the Company expects that a second well will be required to drain the entire 340 acres. The Company's mapping indicates the two sand packages have a total closure area of 1,600-2,000 acres.

The Proven Reserves have a Future Net Income of US $127.9 million and a Net Present Value (NPV) of US $73.6 million. Assumptions used in the NPV calculation include:

• Two wells producing at 5.0 mmcfd;
• A gas price of US $5.71 / mcf;
• A pipeline tariff of $0.21 / mcf;
• Operating Costs of US $15,000 per month; and
• A discount rate of 10%.

The KL # 1 well was drilled to a depth of 10,680 feet and intersected 26 separate gas zones totaling 645 feet of gross pay. The Company elected to perforate and test only the 9,700 and 10,000 feet sands (which totaled 87 feet of gross pay) due to rig availability constraints. The remaining 24 zones totaling 558 feet of gross pay are yet to be tested and do not form part of the Reserves assessment.

Kenai Loop is 100% owned by Buccaneer with total acreage under lease of 8,988 acres.

Near Term Work Plan

The Company expects to spud the second well at Kenai Loop this quarter. The second well will be drilled from the same location as KL # 1 and will have two primary objectives:

• a step out well to test and possibly extend the known aerial extent of both the 9,700 and 10,000 feet sands. If successful this will effect an increase in the current Proven and Probable Reserves; and
• to test the sands below 10,000 feet and specifically those at approximately 10,600 feet intersected in KL # 1. These sands appear similar to the 9,700 and 10,000 sands. If this or other objectives are successful then it is expected Proven and Probable Reserves will be increased.

Further details on the commencement date of this well will be made once rig contracts have been executed.

Commentary

Director of Buccaneer Energy, Dean Gallegos said, "This is a very significant result. We expect that further drilling at Kenai Loop will yield additional increases to booked Reserves. These increases would be based on both the current two pay zones and zones below10,000 feet.

"Clearly, there is substantial upside from the remaining 24 zones (totaling 558 feet of gross pay), which are yet to be tested.”

"As part of the Buccaneer's 3 prong strategy, the Company has planned an aggressively drilling program for the development of the Kenai Loop field and expects to drill additional wells in the next 12 months.

"We anticipate placing the Kenai Loop field into production by the end of 2011."

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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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Buccaneer Wraps Up Ops at Kenai Loop Proj.

- Buccaneer Wraps Up Ops at Kenai Loop Proj.

Wednesday, June 01, 2011
Buccaneer Energy Ltd.

Buccaneer provided the following final flow testing results from its 100% owned Kenai Loop # 1 well.

Highlights

• Successfully completed 4 point flow test for 2 zones totaling 87';
• Absolute Open Flow Potential (AOFP) calculated as 33.2 million cubic feet per day (4,150 BOEPD)
• Long term production rate targeted at 6 - 8 MMCFD (750 - 1000 BOEPD)1; from 87' gross pay tested;
• Net revenue of US $1.05 million per month at 7.0 MMCFD, US $12.6 million per annum;
• 14 zones (423' gross pay) remain to be tested.

A flow test over 4 different choke sizes, a 4 point test, has been successfully completed. This test includes the measurement of pressures which allows for the calculation of the AOFP. The AOFP estimates the well's flow rate without a choke.

The AOFP was calculated as 33.2 million cubic feet per day (MMCFD) which is significantly higher than the expectations. The high AOFP demonstrates the excellent permeability and porosity of the 2 zones perforated and tested.

The long term deliverable production rate from the well has been estimated as 6 - 8 MMCFD (750 - 1000 BOEPD). This steady deliverable production rate is anticipated for approximately 2 years and will facilitate a favorable gas sales contract.

Based on the average production rate of 7.0 MMCFD and the expected floor price of gas in south central Alaska of US $7.00 / MCF this would result in net revenue to the Company of approximately US $1.05 million per month (US $12.6 million per annum). The gas price in
recent contracts has a floor of US $7.00 / MCF and cap of US $10.00 / MCF.

Net revenue is after all royalties, production taxes and expected normal operational costs and amount to ~US $2.00 / MCF. Fixed royalties account for approximately 65% of these costs. An upside potential exists in the area from the remaining 14 zones (423' of gross pay) that have not yet been tested. Buccaneer's contiguous block in the area is in excess of 8,900 acres. An internal estimate of recoverable reserves is currently being finalized after which the Company will engage a third party engineer to complete a reserve report.

Kenai Loop Development Program

The Company is in the process of finalizing a development program for the Kenai Loop project which will include:

• Drilling Kenai Loop # 2 well;
• Commencement of production;
• Acquisition of new seismic; and
• Additional drilling beyond Kenai Loop # 2 well.

Kenai Loop # 1 Previous Results

In the initial phase of the testing program, the Kenai Loop # 1 has successfully tested gas to the surface at a rate of 10 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 16 zones totaling 510' 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 June 1, 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.

Depending on rig availability a second well is planned for the third quarter 2011. The Company is in the progress of formulating a development program for the field, including a production schedule, beyond the initially anticipated 2-3 wells.

Background

The closest wells to the Company's Kenai Loop # 1 well are the Cannery Loop #3 and #4 wells located in the Cannery Loop Field, which were drilled from the same surface location approximately 6,325 feet (1.2 miles) from the Kenai Loop # 1 well location. The Cannery Loop # 3 and # 4 wells have produced a combined 25.5 BCF (3.18 MMBOE) from pay zones whose equivalents are expected to be present in the Kenai Loop # 1 well, but separated from the Cannery Loop Field by geological deposition rather than fault. Drilling to date in the Kenai Loop # 1 well has confirmed that the formations encountered to date are likely separated from the Field.

There were 11 wells in the adjacent Cannery Loop Field which produced 175 BCF (21.9 MMBOE) One well produced from the Sterling Formation which is not one a target in Kenai Loop # 1 well, the other 10 wells produced from the Beluga and Upper Tyonek. The Upper
Tyonek is the primary target Formation of the Kenai Loop #1 well.

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Buccaneer: Casing Ops to Commence at Kenai Loop

- Buccaneer: Casing Ops to Commence at Kenai Loop

Wednesday, May 18, 2011
Buccaneer Energy Ltd.

Buccaneer provided the following update on the progress of the Kenai Loop # 1 well:

• Time: 9.00am (Sydney) May 18, 2011 / 3.00pm (Anchorage) May 17, 2011.
• Depth: 10,680 feet Total Vertical Depth (“TVD”)
• Activity: Wire-line logging operations completed. Casing set and flow testing operations are expected to commence within the next 48 hours.
• Results: Wire-line logging has identified a total of up to 173' of gross pay in the Upper Tyonek Formation.

In the interval 9,421' to 10,680' a partial set of logs were obtained confirming a total of 137' of gross pay. Logs over the intervals that were high graded within the 9,421' to 10,680' interval as significant or very significant in an earlier release have been confirmed with wire-line logs and have been defined as Zone 1, Zone 2 and Zone 3.

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 is in the region where a "gas kick" was experienced during drilling operations. This sand is a high priority test target. There is an additional 12' of lower sand which is a lesser quality sand, but remains attractive.

Zone 2 is an additional massive sandstone zone of approximately 50' of gross pay which logs indicate has good porosity and permeability. This is a high priority test target.

Zone 3 has a confirmed 38' of gross pay which logs confirmed as having good porosity and permeability.

Further logging over the 9,421 to 10,680' interval will be completed now that casing has been set, these logging operations may reveal other promising targets not included in this update.

A full set of logs on the Upper Tyonek Formation down to 9,421' were successful. Those logs have confirmed 4 intervals totaling 36' of gross pay.

The drilling rig must be released June 1. Accordingly, all efforts are currently focused on logging, testing and completing the well within that time frame.

Massive sandstone indicates a relatively thick, uniform, not laminated, sandstone; possibly a channel type of sand with typically very good reservoir characteristics.

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Buccaneer Spuds 1st Alaskan Well

Buccaneer Spuds 1st Alaskan Well

Monday, April 18, 2011
Buccaneer Energy Ltd.

Buccaneer announced the Kenai Loop # 1 well spud on Friday, April 15, 2011. This is a milestone for the Company as it is the first well drilled by the Company in Alaska and comes just over 12 months since the initial acquisition of leases in Alaska was finalized.

At 8:00 AM Monday, April 18, drilling operations for the well had been successful in reaching 3075 feet, the designed surface casing point, preparations are being made to log this surface interval. On completion of logging surface casing will be set before commencement of drilling the next interval.

The next interval includes the Beluga Formation, one of several target objectives for the well. The Total Depth (TD) of the Kenai Loop # 1 well is 10,500 feet. The well is currently on schedule and expected to take approximately another 20 days to reach TD.

Buccaneer Gets ADEC Nod for Drilling Offshore Cook Inlet

Buccaneer Gets ADEC Nod for Drilling Offshore Cook Inlet

Thursday, April 07, 2011

Buccaneer Energy Ltd.

Buccaneer advised that the Alaska Department of Environmental Conservation ("ADEC") has reviewed Buccaneer's February 1, 2011 permit application for the offshore Cook Inlet Exploratory Drilling project and has issued a preliminary decision to approve the permit application.

As the Air Quality Permits are the longest lead time permits to obtain, taking a minimum 180 days, this milestone is an important step towards drilling the Company's offshore Cook Inlet projects.

The Company already held Air Quality Permits for two drilling locations in the offshore Cook Inlet, one at each of the Southern Cross Unit and North West Cook Inlet Unit. This application was in respect to an Air Quality Permit for an additional two drilling locations, one at each of the Southern Cross Unit and North West Cook Inlet Unit.

Extensive air modeling at each drilling location was required as part of the Air Quality Permitting process. This air modeling is required to assess the impact of emissions on the environment from a drilling rig and support vessels at the particular drilling location.
ADEC is now providing opportunity for a 30 day public comment period which expires on May 2, 2011.

Buccaneer to Meet AIDEA for Rig Usage Offshore Alaska

Buccaneer to Meet AIDEA for Rig Usage Offshore Alaska

Thursday, March 31, 2011

Buccaneer Energy Ltd.

Buccaneer advised that the board of the Alaskan Industrial Development and Export Authority (AIDEA) is due to meet on April 1, 2011 to consider and vote on the investment by AIDEA of up to US $30.0 million to acquire a jackup rig for use in the Cook Inlet and other Alaskan waters.

AIDEA's involvement will be as a joint owner in the jackup rig to be acquired. Therefore the proposed investment by AIDEA does not involve the issuance of any securities by the Company.

Extensive due diligence has been undertaken by AIDEA management and a Joint Ownership Agreement (JOA) between the Company's subsidiary Kenai Offshore Ventures, LLC and AIDEA has been negotiated. The JOA contains Conditions Precedent that must be finalized before draw down of the AIDEA investment. The Company is confident that these Condition Precedents can be met in a timely manner.

AIDEA's management have made a recommendation to the board of AIDEA that it views participation on the terms and conditions contained in the JOA is in the best interests of AIDEA and recommends approval of the resolution to proceed.

If the resolution to proceed is approved by the AIDEA board it is anticipated that the JOA will be executed in the week commencing April 4, 2011. Further details will be released at that time.