Buccaneer Energy (ASX: BCC) has executed a binding agreement to acquire a 87.5 – 100% working interest in a highly prospective portfolio of 57,600 gross acres of onshore and offshore oil and gas leases from Stellar Oil & Gas, LLC, a private US based company.
The onshore and offshore leases are in and around the Cook Inlet, Alaska.
The offshore leases adjoin and are adjacent to significant production assets of multi-nationals including ConocoPhillips and Chevron.
There is a P10 reserve potential of 1.2 TCF and 149 million barrels of oil (MMBO) and a P50 reserve potential of 598 BCF and 53 MMBO.
Buccaneer acquired a 6 man management team with a combined 105 year history of identifying, acquiring and developing projects in Alaska.
The state of Alaska offers significant financial incentives to new entrants into Alaska with cash rebates of 45 - 65% on most direct exploration costs (ACES scheme).
Gas prices trade at around a 40% premium to the remainder of the United States due to declining production and increasing demand.
No technical hurdles exist to drill and develop reserves; usual state and federal regulatory requirements will apply to project permitting.
There is an attractive acquisition price of US$2.65 million to be paid in a combination of cash and Buccaneer shares which are subject to a voluntary escrow period.
Drilling is likely to commence in calendar 2010 and Buccaneer continues to assess additional acquisition opportunities.
The portfolio consists of 10,000 gross acres of offshore leases and 47,600 gross acres of
The leases are in and around the Cook Inlet, Alaska, and are next to major producing oil & gas projects of ConocoPhillips and Chevron. The offshore leases are also close to pipeline and platform infrastructure.
The Stellar leases cover 3 identified prospects and 2 significant leads and Buccaneer expects to drill its first prospect in calendar 2010.
The acquisition signals the commencement of an expansion by Buccaneer into a region that it
has identified as significantly under explored, a jack-up drilling rig has not been in the Cook Inlet since 1993.
The region has also been identified by numerous independent studies as having the potential to host additional world class reserves.
Buccaneer said it is continuing to assess further acquisition opportunities in Alaska and other markets.
Disclosure: The author holds no positions in the company