Buccaneer Energy Limited (ASX:BCC) Announce Kenai Loop Spud Date

Sydney, April 11, 2011 AEST (ABN Newswire) - Buccaneer Energy Limited (ASX:BCC) (PINK:BCGYF) is pleased to advise that it expects to spud the Kenai Loop # 1 well on 16 April 2011 (US time).

Kenai Loop is an onshore gas play located in the eastern Cook Inlet Basin in the northern part of the Kenai Peninsula near the city of Kenai (see attached map). The Company has now acquired 100% working interest (80% to 86.5% net revenue interest) in approximately 9,009 acres from multiple landowners.

Features of the Kenai Loop Project are as follows:

- Lies on a ridge between the Kenai Cannery Loop field (175 BCF gas production) and Beaver Creek oil and gas field (6 million barrels oil and 205 BCF gas production);

- Seismic amplitude anomalies in the same productive intervals as the above fields;

- Several control wells and 200 miles of 2D seismic data were used to map Kenai Loop and, similar to the surrounding fields, there are multiple stacked pay zone possibilities between 5,000 and 10,000 feet;

- Resource potential per well is 5 BCF gas and the in-house estimated reserve range is between 35 - 78 BCF gas with most likely reserves of 52 BCF gas. Initial rates per well are estimated to be in the 5 to 10 million cubic feet per day range;

- One drilling permit has been granted and an additional two drilling locations are in the process of being permitted;

- The first well will be a step-out well from the Kenai Cannery Loop field;

- 1 mile to the nearest gas sales pipeline;

- Strong local market for gas in the area, recent gas contracts have a US$7.00 / MCF floor and US$10.00 / MCF ceiling.

Kenai Loop Project

The Kenai Loop project is adjacent to the Cannery Loop Field. The Cannery Loop Field has produced approximately 175 BCF gas. There were 11 wells in the Cannery Loop Field. One well produced from the Sterling Formation which is not a target in the Kenai Loop # 1 well.

The remaining 10 wells produced from the Beluga and Upper Tyonek which are the two Formations targeted by the Kenai Loop #1 well.

The closest wells to the Company's Kenai Loop # 1 well are the Cannery Loop # 3 and # 4 wells in Cannery Loop Field. These wells were drilled from the same surface location approximately 6,325 feet (1.2 miles) from the Kenai Loop # 1 well location.

The Cannery Loop # 3 and # 4 wells produced a combined 25.5 BCF from pay zones whose equivalents are expected to be present in the Kenai Loop # 1 well, but separated from the Cannery Loop Field by geological deposition rather than fault or structure.

The Company therefore considers the Kenai Loop # 1 well is a low risk attempt to extend the Cannery Loop Field.

Multiple Stacked Pay

The Kenai Loop # 1 well is expected to encounter multiple, stacked pay sands between 5,000 and 10,500 feet from equivalent reservoirs that are found in the Cannery Loop Field. The structural interpretation, based on the control wells and 200 miles of 2D seismic data, is that the reservoirs at the Kenai Loop # 1 well are structurally high to the "lowest known gas" for the Cannery Loop Field. Therefore, the risk of finding of a dry hole is considered to be less than 10%.

The principle risk of the Prospect is expected to be reservoir quality. The reservoirs are expected to be present and gas bearing however the permeability of the reservoirs, and thus their flow rates, are yet to be demonstrated. With this in mind, the probability of finding gas reservoirs able to produce gas at commercial rates is thought to be approximately 70%.

It is estimated that the Kenai Loop #1 well will require 20-25 feet of net pay and the draining of around 160 acres to produce enough gas to reach 'pay out'. Log analysis of the closest productive wells (Cannery Loop #3 and #4) indicate that hundreds of feet of net sand in the Beluga and Tyonek intervals (prospective reservoirs in the Kenai Loop # 1 well) are likely to be encountered. This provides a high level of confidence that the well will encounter more than the minimal amounts of net pay and drainable acreage to be commercially successful. Initial producing rates are expected to be in the 5.0 million cubic feet per day range.

In the event of success, a significant up-side opportunity will be established as the limits of the existing gas accumulation in the Cannery Loop area will be demonstrated to exist beyond its currently recognized limits.

For the complete Buccaneer Energy announcement including maps, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/630928.pdf

Contact

Dean Gallegos Mob: +61-416-220-007 Tel: +61-2-9233-2520 http://www.buccenergy.com