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Buccaneer Energy - North Cook Inlet Deep Oil Rights - Additional Information

HIGHLIGHTS
  • Proven oil formations
  • 10 historical wells successfully penetrated oil formations; flow tested at rates up to 4,343 BOEPD (North Forelands # 1 well)
  • Expecting 1P and 2P Reserves


Buccaneer Energy Limited (“Buccaneer” or the “Company”) is pleased to provide additional information in respect to the farm-in agreement announced earlier today in respect to the North Cook Inlet area.

The oil is contained in the Lower Tyonek, Hemlock, Sunfish and West Foreland Formations. Since 1962 these formations have been penetrated by 13 wells (see Table 1); all of which were drilled within the North Cook Inlet Unit acreage. Seven of the wells were drilled in the 1990s; the remaining six wells were drilled by various majors during the discovery and delineation phase of the Cook Inlet in the 1960s.

Of the 13 wells drilled, a total of 10 wells were successfully flow tested at rates of up to 4,343 BOEPD (North Forelands # 1 well) and 4,320 BOEPD (North Cook Inlet # B-02 well), or had logging results confirming the presence of productive oil. The three unsuccessful wells had oil shows but were drilled outside the oil fairway. A table outlining the 13 wells and the results of each are in Table 1.

Buccaneer has engaged Netherland, Sewell and Associates (“NSAI”) to provide a Reserve Report on the oil reserves acquired by the Company, and is expecting to book meaningful Proven and Probable Reserves. NSAI has previously assigned a P50 Resource of 15.5 million BO and 187.2 BCF of gas (46.7 MMBOE) to the Company’s 100% owned North West Cook Inlet Unit that is within the same geological structure as the leases being farm into by the Company.

Drilling Plans

The Company plans to spud a well in Block A to test the Hemlock Formation using the Endeavour jack-up rig. This well will be an offset to the ARCO North Forelands #1 well that was flow tested at 4,343 BOEPD from three formations (including the Hemlock) with oil testing at 43o API Gravity. The ARCO North Forelands # 1 well was drilled in 1992 when oil averaged US$19.25 per barrel.

The well in Block B will be drilled as an offset to the Shell NCI #1 well that was flow tested at 2,270 BOPD from one Tyonek horizon. The Shell NCI #1 well was drilled in 1964 when oil averaged US$3.00 per barrel.



Yours faithfully

BUCCANEER ENERGY LIMITED

Signature




Mr Dean Gallegos
Director

 
 www.buccenergy.com.
 
Table 1 - Historical Oil Wells
 
 

Click here to view the full sized version of the NW Cook Inlet map
 
 
North Cook Inlet Stratigraphic Column
 
 

Competent Person Statement

Information contained in this report pertaining to the Alaskan projects was reviewed by Dr. Vijay Bangia, PhD in Petroleum Engineering from the University of Tulsa, who has over 31 years experience including employment by Shell Oil Company, Union Texas Petroleum, Burlington Resources and Renaissance Alaska. Dr. Bangia has approved the inclusion in this report of the technical matters and information herein in the form and context in which it appears.

 
 
About Buccaneer

Buccaneer Energy Limited is an Australian listed company focused on developing its 100% owned oil & gas assets in Alaska. The Company's flagship projects are a series of onshore and offshore developmental and exploration prospects in Alaska’s Cook Inlet.

Buccaneer Energy has a 3 pronged cashflow strategy:

  • Developing the 100 % owned Kenai Loop onshore gas project with independently assessed 6.4 MMBOE in 2P Reserves;
  • Operating a offshore Jack Up rig for use by third parties in the Cook Inlet; and
  • Developing its 100% owned offshore Cook Inlet projects that have independently assessed 88.4 MMBOE in 2P Reserves / P50 Resources using the acquired Jack Up rig.

 

Buccaneer Energy has a 50/50 joint venture with Singaporean based Ezion, a leader in the development, ownership and chartering of strategic offshore assets and the Alaskan Industrial Development and Export Authority (“AIDEA”). This joint venture has acquired the jack-up rig “Endeavour” which is capable of drilling in all areas of the Cook Inlet, the Beaufort Sea and the Chukchi Sea. Mobilisation of the Endeavour into the Cook Inlet was completed in late August 2012.

The Alaskan Government is supportive of oil and gas in the Cook Inlet. There are a number of fiscal incentive programs for exploration and development in the Cook Inlet.

Buccaneer Energy has drilled the two wells onshore Kenai Loop both of which are in production at a combined rate of 10.0 MMCFD (1,666 BOEPD), the Company expects this to increase to 11 - 12 MMCFD (1,833 – 2,000 BOEPD) if a third gas sales contract can be finalised in the coming months.

Buccaneer Energy also has major working interests in two producing projects in Texas, USA. Pompano is an offshore gas project located in the Gulf of Mexico, drilled by the Company in 2008 and has an additional pipeline of ‘drill-ready’ gas prospects.

 

 

 

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