Buccaneer: Several Options for Cosmo Development (Alaska)

Buccaneer Energy Limited  has release an update on Cosmo # 1 well progress in Alaska in which the Company has a 25% working interest.

An Absolute Open Flow Potential (“AOFP”) four-point test was conducted on the second gas zone tested, and resulted in a calculated AOFP of 16.0 million cubic feet per day (“MMCFD”). This zone has 60′ of perforations in the 4,300’ measured depth (“MD”) sand and successfully produced gas at a maximum tested rate of 7.3 MMCFD on a 30/64” choke with a flowing tubing pressure (“FTP”) of 1,350 psi with no water.

The first gas zone tested was the 5,500’ MD sand from 73’ of perforations yielding a maximum rate of 7.2 MMCFD, also on a 30/64” choke with a 1,318 psi FTP and no water. The first zone resulted in an AOFP of 9.4 MMCFD.

The Company is considering several development options, including a future dual completion in the Cosmo # 1 well’s 5,500’ and 4,300’ MD sands, which could initially produce at a combined gas rate of 8 – 10 MMCFD based on the above test results.

At this stage, only the above two gas zones within the Tyonek Formation were tested; however, there are multiple additional shallow gas zones within the Tyonek Formation, that may be 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 this is finalized, the Endeavour jack-up rig will be mobilised to the Southern Cross Unit to spud the Southern Cross # 1 well. This is the final weekly update on the Cosmo # 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.