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Gulf Oil Spill, Buccaneer Energy, and the future of offshore industry

Following the theme of this thread, the sinking of the Horizon and the oil spill in the GOM is very troubling. The oil slick is getting bigger, and the law suits are flying. The environmentalists are all lining up for what could be a feeding frenzy.

Remeber BPs record in the United States is not good. First Texas City blew up, then they shut down the Alaskan pipeline to avoid a major spill causing the price of gasoline to spike in California. Now they get a double wammy, 11 have died and they are sitting an oil spill that will make the Valedez look small.

This may have an indirect effect on Buccaneer, first the Secretary of the Interior has ordered an investigation and inspection of the deep water platforms and rigs. This will effectively reduce any deepwater oil from produced until they are done. This may also slow down any permits to drill, especially offshore Louisianna. That means it is a good thing Buccaneer is not scheduled to produce Ruby or Jaguar in the next few months.

This also makes shallow, natural gas plays like Pompano very important. Also, oil plays like on-shore Lee County is very important.

Pompano is a naturally pressured conventional gas play. With this dissaster the witch hunt going on over shale plays and water is going to intensify and I am pretty sure it will slow things down. That means a conventional play in shallow water with built infrastructure is going to be in high demand.

Lee County is going to be coming on line, right at the time other large plays and sources of oil are going to be halted while this plays out. That means that as a domestic producer we are going to be selling into an up market with a low risk, low cost source of oil.

This brings us to Alaska, if GOM exploration is shut down, the Cook Inlet looks even better for Buccaner. First the plays for 2010 are all onshore, so they will not be affected by this run around. And if GOM, Eastern Gulf, and the new areas are left off limts that means that Alaska would be the only option. This puts Buccaneer in a great position to sell or farm in on its Alaska properties.

My guess is that anyone operating offshore up there is probably looking for a buyer right now as well.

Lastly, that rig that was needed in Alaska, probably just became available if all activity in the gulf comes to a halt.

So while we try to figure out what to do about 5,000 barrels a day spilling into the gulf, soccer moms still drive SUVs and the petrochemical industry is still continues to grow.

While tragic for the loss of life, and for the environment. Buccaneer is once again very well positioned to take advantage of the market.

Disclosure: long on BCC