Buccaneer Energy Acquires Rig from Marathon Subsidiary

Buccaneer Energy Limited has executed a binding purchase agreement with Glacier Drilling Company, a wholly owned subsidiary of Marathon Oil Company, to acquire the Glacier #1 drilling rig.

The purchase price is $7.5 million and the acquisition is scheduled to settle on June 7, 2012 (US time) and will be funded from proceeds from the $20.0 million project finance facility that is currently being finalized.

The Glacier Rig is a Mesa 1000 carrier mounted land drilling rig. It was built in 2000 and can drill to depths of approximately 12,000'. The rig is unique in that it was designed and built with the input of the drillers that would operate the rig on the Kenai Peninsula of Alaska and was designed to operate close to neighborhoods. The small size is ideal for pad drilling, minimizing the drilling footprint and impact to its surroundings.

The Glacier Rig was used to drill both of the Company's Kenai Loop wells in 2011 and the Company considers its acquisition as an important development in its ability to develop its onshore projects. The Company expects that there will be high demand for the Glacier Rig from other lease operators in the area and has already taken inquiries in respect to leasing.

Buccaneer Director Dean Gallegos said: "The Purchase of the Glacier Rig is a significant milestone and key component of our onshore Alaska strategy, as it will allow us to immediately secure enabling assets in the Cook Inlet. The purchase of the rig insures timely drilling of our Kenai Loop project and also assists in the control of costs associated with the project.

Ultimately though we see the Glacier Rig becoming a profit center for the Company. There is a shortage of high capability rigs on the Kenai Peninsula and we expect to be able to sign leasing deals with third parties while still protecting our interests."

WHAT DO YOU THINK?

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.