Buccaneer Energy: Cosmo Well Results ‘Extremely Positive’

Buccaneer Energy Limited has informed that Sunday, 11 August 2013 (Sydney), a 66’ section of the sand at approximately 4,300’ measured depth (“MD”) was perforated and flow tested in the Cosmo # 1 well, in Cook Inlet, offshore Alaska, in which the Company has a 25% working interest.

The well has successfully tested gas at a maximum rate of 7.3 million cubic feet per day (“MMCFD”) on a 30/64” choke with a flowing tubing pressure (“FTP”) of 1350 psi and no water. Gas was flared at the location.

A four-point test was carried out to estimate the absolute open flow potential (“AOFP”) of the reservoir. Once the pressure data is recovered from down-hole testing equipment, and the AOFP finalised, a further release will be made.

These results are in addition to the first gas production test on a 73’ sand section at approximately 5,500 MD. The zone successfully tested gas at a maximum rate of 7.2 MMCFD on a 30/64” choke with a FTP of 1,318 psi and no water. The AOFP of this section was calculated as 9.4 MMCFD.

At this stage, only the above two gas zones within the Tyonek Formation will be tested; however, there are multiple additional shallow gas zones within the Tyonek Formation, which may be seen and tested in future appraisal wells. The Cosmo # 1 test results are seen by the Company to be extremely positive. The Company will now proceed with a new third party reserve estimate and finalization of field development plans and capital expenditure estimates. The Cosmo # 1 well will now be suspended as a future productive well.

Once operations are completed at the Cosmo # 1 well the Endeavour jack-up rig will be mobilised to the Southern Cross Unit to spud the Southern Cross # 1 well.

Summary of Previous Results

As indicated from logging, MDT and sidewall cores, the Cosmo # 1 well has confirmed the presence of an extensive hydrocarbon column covering numerous formations above the previously known oil reservoirs. The Cosmo # 1 well was drilled on the crest of the structure and encountered geologic formations 200 – 300’ higher than those encountered by the Starichkof State # 1 well. The Cosmo # 1 well has encountered oil bearing sands ~400’ stratigraphically higher than any other wells drilled on the structure to date.

The Tyonek formation, which contained all exploratory targets, was found to have 488’ of indicated gas and oil pay, including multiple shallow gas zones and 8 oil zones.

The previously-discovered Starichkof and Hemlock formations were confirmed to contain oil in this well. The Starichkof formation was found to have 43’ of indicated oil pay, and the Hemlock formation was found to have 149’ of indicated oil pay.