Alaska: KOV, Transocean Extend Jack-up Rig Acquisition Deadline

Buccaneer Energy Limited provides the following operational update on acquisition of Adriatic XI Jack-Up Rig.

The Company’s 50% owned subsidiary Kenai Offshore Ventures, LLC (“KOV”) previously executed a binding Purchase Agreement with Transocean Offshore Resources Limited (“Transocean”) a subsidiary of Switzerland-based Transocean Limited, to acquire the GSF Adriatic XI offshore jack-up rig (“Rig”). The total purchase price is US$68.5 million with the original completion date scheduled to take place on 25 October 2011.

KOV has since appointed Archer Drilling to conduct a detailed scoping study to confirm KOV’s assessment for the modifications and repairs required to bring the Rig back into operational service from its current cold stacked status. The completion of the scoping study is a condition precedent to financing.

Due to logistical delays in Archer Drilling obtaining access to the Rig, the time taken to complete the required scoping study has necessarily been extended. As a result of this access delay, Transocean and KOV have mutually agreed to extend the completion date until 11 November 2011 (US time).

Satisfaction of the Conditions Precedents (“CPs”) required to drawdown the funding facilities is progressing as expected. It is anticipated that all CPs will be fully satisfied in the week preceding the revised acquisition completion date.

After conducting a rig naming competition the Rig will be renamed “Endeavour”. Over 300 submissions were received from members of the public, with the majority of those submissions from Alaskan residents. Endeavour was the ship captain by Captain James Cook when he discovered the Cook Inlet, Alaska and Australia.

Buccaneer Director Dean Gallegos said, “We consider this mutual agreement from both parties to the acquisition of the Rig as normal practice in the circumstances and it is anticipated that this will not materially delay our progress towards exploration drilling at our Southern Cross Unit.”

Kenai Loop Pipeline Construction

The Company also said that construction of the pipeline to connect the Kenai Loop # 1 well to the gas sales line has now commenced. Gas sales are currently on track to commence in December 2011 with net revenue inflows to be received by Buccaneer starting late January 2012.

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Source: Buccaneer Energy Ltd, October 24, 2011