Endeavour receives ABS Certification
Sydney, Feb 26, 2013 AEST (ABN Newswire) - Buccaneer Energy Limited (
ASX:BCC) (PINK:BCGYF) is pleased to provide an update on the "Endeavour - Spirit of Independence" ("Endeavour") jack-up rig and permitting of the Cosmopolitan project.
The Endeavour is owned by Kenai Offshore Ventures, LLC ("Kenai Offshore"), a joint venture with Singapore based Ezion Holdings Limited and the Alaska Industrial Development and Export Authority ("AIDEA"). Buccaneer is the designated Manager of Kenai Offshore.
The Company is pleased to advise that the Endeavour has received full certification from the American Bureau of Shipping ("ABS"). ABS certification certifies the rig as seaworthy and able to operate in accordance with the requirements of its class. ABS certification is recognised globally and is valid for 5 years.
To be able to commence operations within the Cook Inlet the Endeavour requires certification from an additional two organisations. An update to the status of each of these requirements is as follows:
United States Coast Guard ("USCG"). This certifies the rig is able to operate safely with United States waters.
The majority of the certification requirements are satisfied as part of the ABS certification process. Spartan Drilling has prepared a scope of work of the additional requirements to achieve USCG certification and has commenced that work which is expected to be completed in late March 2013.
Final USCG certification will rely on rely upon getting access to technical drawings and inspection certifications that were completed during the shipyard work in Singapore and while in Homer. A dialogue with the previous contractor Archer Drilling is ongoing in respect to getting access to this documentation.
Alaskan Oil and Gas Conservation Commission ("AOGCC"). This certifies the rig is able to operate safely within Alaskan state waters.
Since the Endeavour's arrival in Homer, the jack-up rig has been undergoing work and regulatory inspections to allow the vessel to operate in the Cook Inlet. There has not been a jack-up rig with the operational capabilities of the Endeavour in the Cook Inlet since the early 1990's, and the Company has been working closely with local agencies to comply with the permitting requirements specific to this kind of vessel.
The AOGCC's focus is on drilling safety systems and in particular pressure control systems that operate while drilling i.e. mud systems and blowout preventers. The Endeavour has a renewed mud system and has totally refurbished blowout preventers.
AOGCC certification is being conducted concurrent with ABS and USCG work, but many of these drilling systems can only be fully tested when the rig has been mobilised to the Cosmo location.
Drilling operations will commence as soon as all necessary drilling permits are received and the Alaskan Oil and Gas Conservation Commission ("AOGCC") has given approval to proceed.
Cosmopolitan Project - Permitting Update
The acquisition of the Cosmopolitan ("Cosmo") project was completed in late August 2012. The Cosmo project is located approximately 30 miles to the north west of Homer and is approximately 50' of water. The acquisition was made jointly with privately owned Fort Worth, Texas based BlueCrest Energy II, LP ("BlueCrest") with Buccaneer acquiring a 25% working interest and BlueCrest a 75% working interest, with Buccaneer acting as operator on the project.
The Alaskan Department of Natural Resources ("DNR") approved the Land Use Permit ("LUP") for the Cosmo location in mid December 2012. The LUP allows the Endeavour rig to mobilise to the Cosmo location and jack down its legs to pin to the sea floor.
In mid October the Company, in its role as Operator, lodged a Plan of Operations ("POO") with the Alaskan Department of Natural Resources ("DNR") and a revised C-Plan with the Alaska Department of Environmental Conservation ("ADEC"). The C-Plan is a plan of response in the event of an oil spill while drilling the well, the Company has an approved C-Plan and POO in place for both its Southern Cross and North West Cook Inlet wells.
The following is an update on the above permitting requirements:
C - Plan
The Company lodged the revised C-Plan for Cosmo with ADEC in mid October 2012 seeking a minor amendment that would minimize the additional review process. ADEC subsequently determined that the revision is a major amendment that requires a longer notice and review process.
On 22 January 2013 the Company received a Request for Additional Information ("RFAI") from ADEC, the Company's reply to the RFAI included a requirement to complete a third party engineering study on the affect of ice load on some the Endeavour's equipment which was only completed in the last week.
The RFAI was lodged with ADEC on 21 February 2013. ADEC will now review the Company's responses and the current anticipated timing for issuance of the revised C-Plan is approximately 30 - 45 days.
Plan of Operations
The Company lodged a Plan of Operations ("POO") with the DNR in early October 2012, the DNR released the POO for a 30 day public comment period on 3 December 2012. Many of the comments submitted were common with the comments submitted for the C-Plan to which the Company has responded. The Company anticipates the POO will be approved on a similar timeline to the C-Plan and prior to any drilling operations.
The POO includes the provision to drill 2 wells at Cosmopolitan. The permitting of a second well does not commit the Company to drill, but due to the long lead times gives an option to drill a second well.
The Company is tentatively scheduling the spudding of the first well in late March 2013 on the condition that the Endeavour jack-up rig and the Cosmo # 1 well has received all the required certifications and permits by that time.
Spartan Drilling, LLC
Spartan Drilling, LLC ("Spartan") was selected to replace Archer Drilling and take on the role of drilling contractor to operate the Endeavour in the Cook Inlet. A Letter of Intent has been executed and a Management Agreement will be finalised shortly.
To fully man the Endeavour requires a crew of approximately 38 personnel, as rig crews work on a rotation basis a second crew will also be employed and Spartan is well advanced in this process. The Endeavour is fully crewed with Spartan Drilling now employing 76 personnel of whom 21 are local Alaskans.
Spartan has been operating the Spartan 151 jack-up rig in the Cook Inlet for last 18 months and therefore has direct Cook Inlet operational experience. Additionally it has established proven operating procedures within the Cook Inlet and established supply lines with local industry partners. The Company believes the Endeavour's operations will be enhanced by having this established base from which to operate, and expects some operating and financial synergies will result from two operating rigs.
Contact
Buccaneer Energy Limited
T: +61-2-9233-2520
F: +61-2-9233-2530
WWW: www.buccenergy.com
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