Buccaneer Energy Limited (ASX:BCC) Announces Reserves 82% Above Expectations At The Southern Cross Unit, Alaska

Sydney, Jan 25, 2011 AEST (ABN Newswire) - Buccaneer Energy Limited (ASX:BCC) (PINK:BCGYF) ("Buccaneer" or "the Company") is pleased to provide the following Reserve and Resource calculations for the Southern Cross Unit located in the Cook Inlet, Alaska and completed by Netherland, Sewell & Associates, Inc ("NSA").

The combined Proved + Probable (2P) Reserves and P50 Resources is 27.4 million barrels of oil equivalent, this represents a 82% increase on the expected Reserve and Resource as presented to the Company's AGM on 30 November 2010.

The following Reserves reflect the Company's Working Interest in Southern Cross Unit. Buccaneer holds a 100.0% Working Interest in the project, the Net Revenue Interest is 80.0%:

Reserves:

-----------------------------------------------------------	Proved	  Proved + Probable   Proved + Probable +         (1P)		(2P)		  Possible (3P)-----------------------------------------------------------MMBOE*	 6.3		12.7		    24.1------------------------------------------------------------(*) Million barrels of oil equivalent.

Oil makes up approximately 78% of the 2P Reserves.

NSA has calculated that the above Reserves have the following Future Net Revenue and Net Present Value (using a 10% discount), net of all royalties, capital and operating expenses in US$:

---------------------------------------------------------Category 	     Future             Net Present                      Net Revenue         Value - 10%---------------------------------------------------------Proved Undeveloped: A$260.0 million      A$157.8 million---------------------------------------------------------Proved & Probable:  A$561.4 million      A$310.4 million---------------------------------------------------------Proved + Probable + Possible:         A$1,203.5 million    A$646.8 million---------------------------------------------------------

The anticipated operating cost for the 2P Reserves is expected to be approximately A$7.48/barrel of oil equivalent ("BOE").

Capital Costs

Total capital costs to develop the Proved and Probable Reserves have been estimated at US$226 million and US$116 million net of the rebates available to the Company under the Alaskan Clear & Equitable Share ("ACES"). These estimated capital costs were used by NSA to finalise their expected Net Revenue calculations above.

Estimated capital costs, in US$, to develop the 2P Reserves are broken down as follows:

---------------------------------------------------------                       Gross Costs   Net of ACES Rebates---------------------------------------------------------Appraisal and           A$124.0      A$60.0   Development Drilling:   million      million---------------------------------------------------------Platforms, Pipelines    A$102.0      A$56.0and Facilities:         million      million---------------------------------------------------------

These capital costs equate to an estimated finding and development cost of A$9.13 / BOE for 2P Reserves net of the ACES rebates. The Company anticipates that on completion of the initial appraisal and development wells the remaining wells and platforms, pipelines and facilities capital expenditure can be project financed using debt.

An average oil price of approximately US$91.00 per Barrel and an average gas price of approximately US$9.00 per MCF were used in revenue calculations over the life of the project. The gas price used is in the range of negotiated contracts in the Cook Inlet region with third party utilities and LNG sales.

Resources:

The following Prospective Resources reflect the Company's Working Interest in Southern Cross Unit. Buccaneer holds a 100.0% Working Interest in the project, the Net Revenue Interest is 80.0%:

-----------------------------------------------------------     Low Estimate  Best Estimate  High Estimate     Mean	(P90)		(P50)		(P10)-----------------------------------------------------------MMBOE*	 4.7		14.7		44.3	    20.4-----------------------------------------------------------(*) Million barrels of oil equivalent.

Oil makes up approximately 94% of the P50 Resource. These resources will be produced through the same facilities constructed for the 3P reserve base detailed above, thus will have a lower incremental development cost.

Netherland, Sewell & Associates are a leading US based engineering company. Netherland Sewell were chosen to complete this report as they are experienced in the Cook Inlet, having completed reserves estimations for a number of multi-national energy companies that have oil and gas operations offshore in the Cook Inlet of Alaska.

Southern Cross Unit

The Southern Cross Unit (formerly North Middle Ground Shoal) is in approximately 30' of water with no unusual technical hurdles to drill and develop reserves. Importantly, the Southern Cross Unit has some important risk mitigation features as follows:

- Acreage in the Southern Cross Unit was previously successfully drilled in 1964. The Pan Am A-1 well (MGS State 18743-1) 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. In addition, two other wells on the acreage had positive oil drill stem tests in the Lower Tyonek and Hemlock formations. Neither the gas nor oil was produced due to very low oil and gas prices at that time; and

- The Company has a 3D seismic survey license over the Southern Cross Unit.

Southern Cross 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.

For the complete Buccaneer Energy Limited announcement including table and map, please refer the following link:

http://www.abnnewswire.net/media/en/docs/65070-ASX-BCC-621545.pdf

Contact

Dr Dean Gallegos Director Tel: +61-2-9233-2520 http://www.buccenergy.com