Alaska: Buccaneer Acquires Cosmo from Pioneer

Buccaneer Energy Limited has executed a Purchase and Sale Agreement for the acquisition of the two main productive leases in the former Cosmopolitan Unit (“Cosmo”) from  Pioneer Natural Resources Alaska, Inc.

Cosmo is an undeveloped oil and gas field located in 50 feet of water in the Cook Inlet of Alaska and is in close proximity to the shoreline at Anchor Point on the Kenai Peninsula. Cosmo has regional proximity to Buccaneer’s other Alaskan assets and will utilise the capabilities of the Endeavour rig during the northern hemisphere winter.

The acquisition is being jointly made 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 to assume operatorship of the project. Settlement of the acquisition is due on 30 March 2012 with the commercial terms of the transaction remaining confidential.

The strong interest in the region, which contains the Cosmo project, is demonstrated by Apache Corporation acquiring leases surrounding and adjoining the leases near Cosmo during the last State lease sale conducted in June 2011.

Buccaneer Director Dean Gallegos said:

“The acquisition of our interest in the Cosmo project provides substantial benefits for the Company. Not only does it significantly increase Buccaneer’s oil and gas reserves but it also increases operational utilisation and revenue performance of the Endeavour jack-up rig, demonstrating the strength of our Alaskan strategy.

 “Further the Cosmo acquisition fits very well in our Alaskan portfolio. As a more advanced project with an existing well and some infrastructure already in place, Cosmo provides nearer term oil and gas production potential than our two other  Cook Inlet offshore projects which will still be developed in parallel.”

Preliminary Development Plans

Development of the Cosmo project involves two separate plans:

• A shallow gas development (3,000 – 4,000 feet) to be drilled with a jack-up rig; and

• A deeper oil development (6,000 – 8,000 feet) that can be exploited using directionally drilled wells from the shoreline.

An offshore well using the Endeavour jack-up rig is planned for late 2012 that will further quantify both the oil and gas zones of the project.  Development of the Cosmo project will begin in the northern hemisphere winter of 2012 and continue through to 2014. The preliminary development plan includes drilling and producing oil wells from the existing onshore production site and drilling offshore water injection wells for reservoir pressure maintenance.

Separately, offshore gas wells will be drilled and tied back to the existing onshore site which will be connected to ENSTAR’s recently completed gas transportation line.

[mappress]
Offshore Energy Today Staff, February 2, 2012; Image: Buccaneer Energy