Cosmopolitan Acquisition
Sydney, Aug 28, 2012 AEST (ABN Newswire) - Buccaneer Energy Limited (
ASX:BCC) is pleased to advise that the Company's lender Richmond Hill Investment Co., LP has provided its written consents in respect to Buccaneer assuming the role of Operator in respect to the Cosmopolitan Project ("Cosmo").
Cosmo is being jointly acquired with privately owned Fort Worth, Texas based BlueCrest Energy Inc. ("BlueCrest") acquiring a 75.0% working interest, with Buccaneer acquiring a 25.0% working interest and assuming operatorship of the project.
Closing documents have been exchanged with Pioneer Natural Resources Alaska, Inc. ("Pioneer") and funds have been transferred to Pioneer to enact financial close of the transaction.
The Company plans to spud the first well at Cosmo in November 2012.
Reserves
As part of its due diligence on Cosmo, Buccaneer and BlueCrest engaged respected consulting firm Ralph E Davis to conduct an independent reserve estimate on the project, which found that Cosmo contains an estimated 55.2 million barrels of oil equivalent ("MMBOE") of 2P reserves (13.8 MMBOE net to Buccaneer). The 2P Reserves of Cosmo increase Buccaneer's independently assessed Alaskan 2P Reserves from 17.5 million barrels of oil equivalent ("MMBOE") to 31.3 MMBOE.
The oil component of the project has been substantially de-risked by Pioneer who during the period of ownership from 2002 completed the following:
- A full field development plan based on oil in place of approximately 350 MMBOE with a 20% recovery factor using secondary recovery methods;
- Three well bores in the oil zones;
- A long term production test; and
- Modern 3D seismic survey.
Secondary recovery methods are commonly used within the Cook Inlet with the MacArthur River Field located in the northern Cook Inlet having produced 630 MMBO via secondary recovery.
The oil reservoir within the MacArthur River Field was previously owned by Chevron Corporation ("Chevron"), Hilcorp Energy Company acquired Chevron's interests in this field in January 2012.
Background
Cosmo is an undeveloped oil and gas field located in 50 feet of water in the Cook Inlet of Alaska and is in close proximity to the shoreline at Anchor Point on the Kenai Peninsula. Cosmo has regional proximity to Buccaneer's other Alaskan assets and will utilise the capabilities of the Endeavour rig during the northern hemisphere winter.
The strong interest in the region, which contains the Cosmo project, is demonstrated by Apache Corporation acquiring leases surrounding and adjoining the leases near Cosmo during the last State lease sale conducted in June 2011.
Preliminary Development Program
Development of the Cosmo project involves two separate programs:
1. A shallow gas development (3,000 - 4,000 feet) to be drilled with the Endeavour jack-up rig; and
2. A deeper oil development (6,000 - 8,000 feet) that can be exploited using directionally drilled wells from onshore.
An offshore well using the Endeavour jack-up rig is planned for late 2012 that will further quantify both the oil and gas zones of the project.
Development of the Cosmo project will begin in the northern hemisphere winter of 2012 and continue through to 2014.
Offshore gas wells will be drilled and tied back to the existing onshore site which will be connected to ENSTAR's recently completed gas transportation line.
Cosmo Reserves Estimates (View reserves estimates at link below).
Increased Jack-Up Rig Utilisation Improves Economics
The acquisition of Cosmo will allow the use of the Endeavour jack-up rig to provide a more efficient development opportunity than was previously available to Pioneer. Without access to a jack-up rig, all wells, including water injection wells needed to be drilled as long reach directional wells from onshore. Further, the shallower gas reserves could only be reached by an offshore drilling program that will utilise the Endeavour. Utilisation of the Endeavour jack-up rig materially improves the economic parameters of the overall project.
The Cosmo project is located in the southern part of the Cook Inlet which is free of ice flows during winter. Cosmo will provide a winter operational location for the Endeavour jack-up rig to utilise the rig when ice flows in the northern part of the Cook Inlet preclude drilling during the November - March period.
This provides several years of winter drilling activities and is expected to materially improve the profitability of the Company's offshore drilling division which was previously based on a 240 day drilling season.
To view the complete Buccaneer Energy announcement including Figures and Cosmos reserves estimates, please click the link below:
http://media.abnnewswire.net/media/en/docs/ASX-BCC-691712.pdf
Contact
Buccaneer Energy Limited
T: +61-2-9233-2520
F: +61-2-9233-2530
WWW: www.buccenergy.com
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