OilVoice - Buccaneer Energy Aquires Additional Working Interest in the Cook Inlet, Alaska

Buccaneer Energy Aquires Additional Working Interest in the Cook Inlet, Alaska

Wednesday, August 25, 2010

Buccaneer Energy Limited advises that its wholly owned subsidiary Buccaneer Alaska, LLC has entered into a binding agreement with Chevron Corporation to acquire the remaining 50% working interest (2,506 net acres) that it does not already own in 2 leases on its North Middle Ground Shoal (Southern Cross Unit) structure in the Cook Inlet, Alaska.

This acquisition gives the Company a 100% WI in all the leases that cover the North Middle Ground Shoal structure, this equates to a net 10,108 acres.

The North Middle Ground Shoal ('NMGS') field is in approximately 30' of water with no unusual technical hurdles to drill and develop reserves. The NMGS field is within 5-10 miles of four significant oil and gas fields as follows:
• Trading Bay Field with production to date of 103 million BO, 73 BCF of gas and 360 thousand barrels of Natural Gas Liquids ('NGL');
• McArthur River Field with production to date of 630 million BO, 261 BCF of gas and 9 million barrels of NGL;
• Middle Ground Shoal Field with production to date of 198 million BO and 93 BCF of gas; and
• South Granite Point Field with production to date of 147 million BO and 131 BCF of gas.

Since acquiring the initial leases from Stellar Oil & Gas, LLC in March 2010 the company has expanded its lease position from a net 1,280 acres to a net 10,108 acres, through acquisition.

Importantly, the Company now owns the lease on which the Pan Am A-1 well (MGS State 18743-1) was drilled in 1964 and which flow tested gas (> 3 mmcf/day) in the Lower Tyonek Formation from one of three gas intervals identified on drilling logs; this well also had significant oil shows in the Hemlock formation at the bottom of the well. Neither the gas nor oil was produced due to very low oil and gas prices at that time.

Reserves
On acquisition in March 2010 the NMGS assessed P10 reserves were 154 BCF of gas and 18 million barrels of oil (MMBO). The P50 reserves were 60 BCF and 8 MMBO. These reserves are expected to increase significantly due to the expanded lease position and the incorporation of 3D seismic data.

The Company has appointed Netherland Sewell, one of the leading US based engineering firms, to complete a third party engineering report on the reserves for NMGS and the Company expects Proven, Probable and Possible (3P) reserves to be assigned.

There is also possible access to the existing Platform approximately 5 miles to the south, this would significantly reduce capital expenditure and time to first production.