Buccaneer Energy Limited (ASX:BCC) Kenai Loop Drilling Commenced

Sydney, Aug 29, 2011 AEST (ABN Newswire) - Buccaneer Energy Limited (ASX:BCC) is pleased to advise that the second well at its 100% owned Kenai Loop project spud on Saturday 27 August 2011 (Sydney). The well is currently at 3,050 feet and preparing to set surface casing.

The well is expected to take 30 days to reach its target depth of 11,000 feet with testing expected to take an additional 14 days.

This second well will be a development well directionally drilled from the same drilling pad as KL #1. The bottom-hole location is expected to be approximately 1,800 feet from that of the KL #1 well. The Company intends to test the 9,700 and 10,000 zones tested in KL #1 and additional zones at approximately 10,600 feet that were untested in KL #1 due to rig availability constraints.

If successful, there is likely to be a significant increase to current Proved and Probable (2P) Reserves of 38.3 BCF (4.8 MMBOE), of which 31.5 BCF (3.9 MMBOE) are Proven Reserves.

The Company will give weekly drilling updates commencing Wednesday 7 September.

Commentary

Director of Buccaneer Energy, Dean Gallegos said:

"The Company is very keen to take full advantage of the recently executed gas sales contract with ENSTAR, which allows for deliveries of up to 15.0 MMCFD.

In addition to the pay zones in the 9,700 & 10,000 feet sands, the sands around the 10,600 feet depth was also a high priority testing target based on the logs from KL #1. The second well will penetrate the 10,600 feet sands in a slightly higher structural position than in KL #1. Successfully flow testing these three sands is the most immediate way for Buccaneer to increase booked reserves and future production capacity."

Contact

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