Buccaneer Energy Limited Jack-Up Rig Acquisition Funding In Cook Inlet Alaska

Buccaneer Energy Limited is pleased to announce that it has incorporated a wholly owned subsidiary Buccaneer Alaska Drilling. Subsequently, Buccaneer Drilling incorporated a wholly owned subsidiary Kenai Offshore Ventures.
It is the intention that Buccaneer Drilling and its wholly owned subsidiary Kenai Offshore will be the Company's corporate entities that will acquire a Mobile Offshore Drilling Unit i.e. jack-up rig. It is the intention that Kenai Offshore will operate the MODU in the Cook Inlet as a commercial stand alone venture, contracting drilling services to third party lease operators in the Cook Inlet. This will include Buccaneer Alaska, the holder of the Company's leases in the Cook Inlet.
On 9 November 2010 Kenai Offshore made an application to the Alaskan Industrial and Development Export Authority for an allocation of US$60.0 million in bonds under the US Federal Governments Recovery Zone Facility Bond program. AIDEA is the issuing authority within Alaska for the RZFB program.
The main feature of the RZFB is that it allows companies, with an allocation, to issue them to investors with the income from the bonds being exempt from US federal taxes. The coupon rate paid and term of the RZFBs is a commercial negotiation between issuer and investor.
On 16 November 2010 Kenai Offshore was informed by AIDEA that its application was successful and it had been allocated the full US$60.0 million in RZFBs. This allocation gives Kenai Offshore the ability to issue up to US$60.0 million in RZFBs, Kenai Offshore is not required to issue the full allocation and will consider the most appropriate funding structure in conjunction with its financial advisors. The allocation of RZFBs must be utilised by the 31 December 2010.
A key point of Kenai Offshore RZFB application was that the acquisition and mobilisation of a jack-up rig to the Cook Inlet would create significant job opportunities within the Borough of Kenai which has suffered heavily during the economic downturn.
Source:  ABN Newswire (Press release)