Buccaneer jack up to drill in Cook Inlet in mid-2012

Alaska’s Cook Inlet may soon have two jack up rigs, the first drilling units to have operated there in many years.

Buccaneer Energy Ltd., Sydney, will acquire a cantilever jack up to be winterized to drill in Cook Inlet off Alaska in the 2012 season.

Meanwhile, Escopeta Oil & Gas Co., Houston, was awaiting final approval to clean out conductor pipe and spud an exploratory well on the Kitchen Lights Unit in Upper Cook Inlet using the Spartan 151 jack up.

Buccaneer will buy the GSF Adriatic XI unit, capable of drilling in as much as 300 ft of water, from Transocean Offshore Resources Ltd. for $68.5 million. After closing set for October, the rig will be transported to an Asian shipyard.

The rig was built in 1982 and upgraded in 2004. It has been cold-stacked in Malaysia since September 2009. Two inspections deemed it to be in good condition, Buccaneer said. It is equipped with 10,000 and 15,000 psi blowout preventers and will also be capable of working in the Chukchi and Beaufort seas.

The Adriatic XI’s first well will be on Buccaneer’s 100% owned Southern Cross project in 50 ft of water in Cook Inlet (OGJ Online, May 10, 2011). It will offset several wells on company leasehold that tested oil and gas and were never produced.

Southern Cross is within 5 miles of four oil and gas fields with combined cumulative production of 1.1 billion bbl of oil and more than 550 bcf of gas.

Kenai Offshore Ventures LLC will operate the rig for Buccaneer. KOV is owned 50% by Buccaneer and 50% by Ezion Holdings Ltd., Singapore.

KOV estimated $86.5 million to acquire, modify, and mobilize the rig to Cook Inlet. Funding sources are KOV $6.85 million, Alaska Industrial Development and Export Authority $24-30 million, and a $50-56 million senior debt facility that is in final documentation.

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