Executes Agreement with ConocoPhiilips on Deep Oil Rights
Sydney, May 6, 2013 AEST (ABN Newswire) - Buccaneer Energy Limited (
ASX:BCC) is pleased to advise that it has executed an agreement with ConocoPhillips Company and ConocoPhillips Alaska, Inc. (collectively "ConocoPhillips") whereby the Company has the right to earn a 100% working interest in ConocoPhillips deep oil rights in 23,368 acres ("Deep Oil Rights Agreement") held by the North Cook Inlet Unit ("NCIU").
The NCIU has produced almost 1.9 trillion cubic feet of gas from the shallow Sterling and Beluga formations since the 1960's and the NCIU is currently held by gas production that has been predominantly used to supply ConocoPhillips' 100% owned LNG facility. The shallow gas production will remain owned by ConocoPhillips.
ConocoPhillips NCIU borders the North West Cook Inlet Unit and as part of the transaction the Company has entered into a license agreement on the existing 3D seismic owned by ConocoPhillips. The 3D license covers both the area subject to the Deep Oil Rights Agreement and parts of the Company's North West Cook Inlet Unit, including the areas over which the Company is permitted to drill two wells.
The Company's access to the Endeavour jack-up rig was an important aspect in negotiating the Deep Oil Rights Agreement. Buccaneer agreed to the division of the farm-in area into two acreage blocks, Block A and B, with a well commitment in each. A well must be spudded in either Block A or Block B by December 31, 2014 and a second well in the remaining block by December 31, 2015.
The Company plans to spud the first well in the Southern Block A using the Endeavour jack-up rig. As a result of this transaction the Company is revising its planned offshore drilling schedule over the next two years. This may require some discussions with the Alaska Department of Natural Resources, once this is finalised a further release will be made.
There is no upfront cash consideration to be paid by Buccaneer and ConocoPhillips shall retain an Overriding Royalty Interest ("ORRI").
Contact
Buccaneer Energy Limited
T: +61-2-9233-2520
F: +61-2-9233-2530
WWW: www.buccenergy.com
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