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Endeavour Jack-Up - US Coast Guard Certification & Mobilised to Cosmo Location

Buccaneer Energy Limited (“Buccaneer” or “the Company”) is pleased to provide an update on the “Endeavour – Spirit of Independence” (“Endeavour”) jack-up rig.

The Endeavour is owned by Kenai Offshore Ventures, LLC (“Kenai Offshore”), a joint venture with Singapore based Ezion Holdings Limited and the Alaska Industrial Development and Export Authority (“AIDEA”). Buccaneer is the designated Manager of Kenai Offshore.

The Company is pleased to advise that the Endeavour has received the Certificate of Compliance from the United States Coast Guard (“USCG”). The USCG Certificate of Compliance certifies the rig is able to operate safely within United States waters.

To be able to commence operations within the Cook Inlet the Endeavour rig must be inspected and certified by the Alaskan Oil and Gas Conservation Commission (“AOGCC”). This agency certifies the rig’s drilling equipment is suitable for the drilling projects that are undertaken. The drilling equipment, including blowout preventers, pumps, kick detection and other well control items are critical to operate safely within Alaskan state waters. The AOGCC conducted preliminary inspections during the last week and did not raise any specific points of concern. Final drawings and equipment certifications are being obtained and a final AOGCC inspection will be conducted after the rig has been placed in its normal drilling position at the Cosmopolitan drill site.

The AOGCC’s focus is on drilling safety systems and in particular pressure control systems that operate while drilling i.e. mud systems and blowout preventers. The Endeavour has a renewed mud system and has totally refurbished blowout preventers.

The AOGCC will return when the above pressure control systems have been fully re-activated when can only be completed once the Endeavour is at the Cosmopolitan location.

On Cosmopolitan Location

The acquisition of the Cosmopolitan (“Cosmo”) project was completed in late August 2012. The Cosmo project is located approximately 30 miles to the north west of Homer. The acquisition was made jointly with privately owned Fort Worth, Texas based BlueCrest Energy II, LP (“BlueCrest”) with Buccaneer acquiring a 25% working interest and BlueCrest a 75% working interest, with Buccaneer acting as operator on the project.

The Company is also pleased to advise that the Endeavour left the Homer dock under tugs on Friday 29 March 2013 and arrived on location at the Cosmo location on Saturday 30 March 2013.

The Endeavour’s legs have been jacked down in approximately 84’ of water and have been safely pinned to the seabed. Pre-loading operations were successful and the rig has been jacked up to operating height of 45’ above mean sea level and the tugs have been released. The Endeavour’s drilling deck has been cantilevered into operating position and excess drill pipe and other equipment is being removed in preparation for final commissioning prior to commencing drilling operations.

The Endeavour’s crews will spend the next 10-14 days preparing for drilling operations which will include the above AOGCC certifications.

Spartan Drilling, LLC - Management Agreement

The Company advises that its wholly owned subsidiary Kenai Drilling, LLC has executed a Management Agreement (“MA”) with Spartan drilling, LLC (“Spartan”). The MA subcontracts the day to day management of the Endeavour jack-up rig to Spartan, including crewing and maintenance requirements.

The commercial terms of the contract are confidential but industry standard for a contract of this type.

Spartan has been operating the Spartan 151 jack-up rig in the Cook Inlet for last 18 months and therefore has direct Cook Inlet operational experience. Additionally it has established proven operating procedures within the Cook Inlet and established supply lines with local industry partners. The Company believes the Endeavour’s operations will be enhanced by having this established base from which to operate, and expects some operating and financial synergies will result from two operating rigs.

Permitting

The Company, as Operator, is working with the Alaska Department of Environmental Conservation (“ADEC”) for approval of the revised C-Plan. It is expected that this will be issued in mid April after which drilling of the Cosmo # 1 well can commence.



 

Yours faithfully

BUCCANEER ENERGY LIMITED

Signature




Mr Dean Gallegos
Director

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