AIDEA Invests in Cook Inlet Rig

AIDEA Invests in Cook Inlet Rig

Wednesday, April 06, 2011
Buccaneer Energy Ltd.

Buccaneer advised that the board of the Alaskan Industrial Development and Export Authority (AIDEA) voted unanimously to invest up to US $30.0 million, as a joint owner, in the acquisition of a jack-up rig.

A Joint Ownership Agreement (JOA) is expected to soon be executed between the Company's subsidiary Kenai Offshore Ventures, LLC (KOV) and AIDEA. The joint project has been named Project Endeavour.

The JOA contains 15 Conditions Precedent that must be finalized prior to draw down of the AIDEA investment. The Company considers 5 of the Condition Precedents to be Material Conditions Precedent and these are listed in Schedule 1. The Company is confident that all the Condition Precedents can be met in a timely manner.

AIDEA's involvement and investment is as a Preferred Owner of the jack-up rig with an initial 85.7% interest in the Joint Project. KOV will be the sole Common Owner with a 14.3% initial interest in the Joint Project.

The following are the main features of AIDEA's Preferred Ownership interest:

• AIDEA's 85.7% Preferred Ownership interest in the Joint Project will be repurchased over a period of 6 years using cash flow generated by contracting of the rig for drilling operations. AIDEA's Preferred Ownership interest will be canceled as it is repurchased so that on conclusion of the repurchase program KOV will be the 100% owner of the jack-up rig;
• AIDEA will be paid a fixed annual dividend of 8.0%, paid semi-annually in arrears, on the Preferred Owner's outstanding balance of the Principal Repurchase;
• AIDEA's Preferred Ownership interest will be repurchased by way of an annual payment, in arrears. The repurchase schedule commences when the jack-up rig is delivered to the Cook Inlet ready for drilling operations; and
• Any dividend payment or Principal Repurchase that is not made in a 12 month period will accrue to the following 12 months.

The Company anticipates that the total cost of the acquisition, modification and mobilization of the jack-up rig to the Cook Inlet from its current location will be approximately US $85.0 million.

 

Exclusive Use Rights

Buccaneer will have the first right of refusal to utilize the rig until the conclusion of the 2013 drilling season i.e. November 2013. Under the terms of the JOA Buccaneer has committed to drilling a minimum of 4 wells in the Cook Inlet using the acquired jack-up rig.

Subsea 7 Secures E.ON Contract for Huntington Development

Subsea 7 Secures E.ON Contract for Huntington Development

Thursday, March 31, 2011

Subsea 7 Inc.

Subsea 7 announced the award of an engineering and installation contract by E.ON Ruhrgas UK E&P for the Huntington Development in the North Sea.

The Subsea 7 workscope comprises the installation of 12km of the 8-inch Gas Export pipeline, installation of infield flexible flowlines, main static umbilical and associated risers as well as installation of subsea structures followed by tie-ins, pre-commissioning and system testing. Engineering work has commenced in the Aberdeen office with installation using several of Subsea 7's fleet occurring through to 2012.

Steph McNeill, Subsea 7's Vice President – UK stated, "I'm delighted that E.ON Ruhrgas UK E&P has chosen Subsea 7 to work on its prestigious Huntington development. We have safely and successfully delivered numerous North Sea projects whilst maximizing efficiencies through security of supply and early engagement in the planning and design process. We look forward to similar success with the Huntington Development over the coming year."
The Huntington Development is located 140 nautical miles North East of Aberdeen in Block 22/14 in the Central North Sea with water depths of 90m. E.ON Ruhrgas UK E&P is the operator and has a 25 % interest.