BCC Beam Communications Holdings Limited

Buccaneer Energy Limited (ASX: BCC) is pleased to advise that the jack-up rig “Endeavour – Spirit of Independence” has been loaded onto the Kang Sheng Kou heavy lift vessel and is now in route to the Cook Inlet, Alaska.

The Endeavour jack-up rig mobilizes to the Cook Inlet, Alaska (Photo: Business Wire)

The delivery of the Endeavour jack-up rig to the Cook Inlet will complete the first phase of Buccaneer’s business plan started almost 2 years ago. That plan included the acquisition of the Endeavour and the modification and repairs in Keppel FEL shipyard, which was managed by Buccaneer’s internal management team.

The Endeavour project was funded through a joint venture company Kenai Offshore Ventures, LLC (“KOV”). With Buccaneer in the joint venture are Singapore listed Ezion Holdings Limited, that specializes in the development, ownership and chartering of strategic offshore assets and the provision of offshore marine logistics and support services to the offshore oil and gas industries, and the Alaska Industrial Development and Export Authority (“AIDEA”). AIDEA will be investing a total of US$23.65 million into KOV on completion of the mobilization phase.

“We are very excited to finally have the Endeavour on its way to the Cook Inlet,” said Jim Watt, President of Buccaneer Alaska. “We spent a significant amount of time and effort outfitting the Endeavour to make it ‘fit for purpose’ for work in the Inlet, and once it’s on station will stay for years to come, providing the citizens of Southcentral Alaska with the key to unlock the vast amounts of oil and gas locked in the Cook Inlet.”

AIDEA is a public corporation of the State of Alaska, created in 1967 by the Alaska Legislature in the interests of promoting the health, security, and general welfare of all the people of the state. Its mission statement is to increase job opportunities and otherwise encourage the economic growth of the state, including the development of its natural resources, through the establishment and expansion of manufacturing, industrial, energy, export, small business, and business enterprises.

Mr. Watt continued, “Buccaneer would like to thank AIDEA and all those who have worked to make this a reality. If not for their foresight, dedication and hard work, the Endeavour would not be on its way.”

It is expected to take approximately 21 – 28 days for Endeavour to reach the Cook Inlet, where the rig will be offloaded and towed via tug to the first well location in Buccaneer’s offshore program.

On completion of the northern Cook Inlet 2012 drilling season, anticipated in early November, it is anticipated that the rig will then be towed to the Cosmopolitan location in the ice free southern Cook Inlet to commence drilling operations.

Endeavour’s Capabilities

The Endeavour is a Marathon LeTourneau 116-C jack-up rig. First constructed in 1982, it was upgraded in 2004 and was selected following a rigorous global search process.

Its existing capabilities make it suitable for most water depths that exist in the Cook Inlet and northern Alaskan waters.

These capabilities include:

• The ability to operate in water depths up to 300 feet;
• Constructed of -10o Celsius rated steel allowing it to work safely in the wide environmental envelope that exists in the Arctic, including the Chukchi and Beaufort Sea which are located offshore the North Slope;
• Multiple sets of BOPs and well control equipment with a maximum pressure rating of 15,000 PSI, giving the rig capacity to drill high pressure horizons that can exist in the Cook Inlet;
• Capable of drilling to 25,000 feet.
• Cantilever beam extensions that enhance its ability to work over existing platforms in the Cook Inlet to undertake drilling and repair operations; and
• High variable deck load rating of 8,300 KLBS which enable it to operate with extra equipment and materials onboard, should support services be limited.

As previously advised, KOV executed a Repair Contract with Keppel FELS Shipyard in Singapore for the repair and modification of the jack-up rig, Endeavour. Substantially more work than was originally scheduled for the Singapore shipyard period has now been completed including the following:

• Engineering and steel works necessary to satisfy changes in regulations that required an increase in lifeboat capability for jack-ups operating in US waters. This required engineering and steel work was not originally anticipated;
• During 2012 several opportunities to use the rig as a standby rig for “major” operators who have projects in the Chukchi Sea and Beaufort Sea presented a unique opportunity to achieve improved utilization of the rig. In order to realize this improved utilization, however, additional improvements to the rig were needed to insure suitability;
• The acquisition of the Cosmopolitan project in the southern Cook Inlet that is ice free in winter meant a winter drilling location for the Endeavour thereby increasing its utilization. This required the work that was going to be completed in the first winter period to be brought forward to Singapore; and
• The desire to certify the Endeavour with the American Bureau of Shipping (ABS) for the maximum 5 years so no interruptions to operations will be necessary meant that all key systems needed to be taken to workshops, stripped, repaired where necessary, and then reinstalled.

Offshore Projects

In addition to its three onshore Cook Inlet projects, the Company also has three projects located offshore Cook Inlet, Alaska.

All of these projects have independent assessed reserves and resources by respected US based engineering firms as follows:

Certified Offshore Reserves and Resources (MMBOE)

Project   Interest   MMBOE   Classification   Engineer North West Cook Inlet 98.2% 45.9 P50 Resource Netherland, Sewell & Assoc. Southern Cross 100.0% 12.7 2P Reserve Netherland, Sewell & Assoc. Southern Cross 100.0% 14.7 P50 Resource Netherland, Sewell & Assoc. Cosmopolitan 25.0% 13.8 2P Reserve Ralph E Davis Total 87.1

Buccaneer is the Operator for all of the above projects.

About Buccaneer

Buccaneer Energy Limited is an Australian listed company focused on developing its 100% owned oil & gas assets in Alaska. The Company's flagship projects are a series of onshore and offshore developmental and exploration prospects in Alaska’s Cook Inlet.

Buccaneer Energy has a 3 pronged cash flow strategy for Alaska:

• Developing the 100 % owned Kenai Loop onshore gas project with independently assessed 4.8 MMBOE1 in 2P Reserves;
• Acquiring and operating an Offshore jack-up rig for use by third parties in the Cook Inlet; and
• Developing its 100% owned offshore Cook Inlet projects that have independently assessed 73.3 MMBOE in 2P Reserves / P50 Resources using the acquired jack-up rig.

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