Buccaneer Energy Limited (ASX: BCC):

HIGHLIGHTS

  • Sales commenced from Kenai Loop # 1 well
  • Selling into ENSTAR winter daily auction
  • Ability to sell gas to ConocoPhillips LNG facility

Buccaneer Energy Limited (ASX: BCC) is pleased to advise that production from its Kenai Loop # 1 well commenced on 14 January 2012 (U.S. time).

The Company anticipates producing the well at up to 5.0 million cubic feet per day (“MMCFD”) for the first 2-3 months while reservoir performance is monitored. The Company will be selling gas into ENSTAR’s winter daily auction. The daily auction is a system where gas producers are advised of ENSTAR’s additional requirements for the next 24 hours and the producers bid the price and volume to sell gas to meet these requirements.

ENSTAR’s additional winter demand requirement during this period is primarily based on weather conditions and can fluctuate on a daily basis.

The Company also has the ability to sell gas to ConocoPhillips under its gas sales agreement with the local LNG facility if the total daily production is not purchased by ENSTAR.

Buccaneer Director Dean Gallegos said:

“The commencement of gas production and sales from the Kenai Loop project is a significant milestone for Buccaneer and marks the first production from our substantial Alaska holdings. We are extremely proud of the speed and efficiency our team has displayed in going from discovery to permitting and production at Kenai Loop in less than 9 months - this includes the construction of a pipeline and the facilities necessary to drill, produce and transport a substantial amount of natural gas.

“Buccaneer is looking forward to an active 2012 with drilling at Kenai Loop likely to commence in 2nd quarter 2012, prior to the start of its offshore program.”

About Buccaneer

Buccaneer Energy Limited (ASX: BCC) is an energy exploration and production company. Through its wholly-owned subsidiaries, Buccaneer Resources and Buccaneer Alaska, the U.S. headquartered independent is focused on acquiring significant working interests in undervalued, low-risk development properties that possess significant undeveloped upside potential. The Company places a premium on bringing both regional and local expertise to each opportunity, and as a result, its opportunistic approach to finding hydrocarbons is not limited by geographic considerations.

Buccaneer Alaska focuses on developing opportunities in the Cook Inlet of Alaska that includes the Kenai onshore project and other offshore opportunities. Buccaneer Resources is focused on the Gulf of Mexico, onshore opportunities in the lower 48 and certain international opportunities around the world. Under Buccaneer Resources, the Company operates its Pompano Field and Lee County producing assets.

Through Buccaneer Energy's joint venture with AIDEA and EZION, Kenai Offshore Ventures, the company has completed the acquisition of an Offshore Drilling Unit expected to arrive in the Cook Inlet during the 2012 drilling season.

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