Buccaneer advised that the board of the Alaskan Industrial Development and Export Authority (AIDEA) voted unanimously to invest up to US $30.0 million, as a joint owner, in the acquisition of a jack-up rig.
A Joint Ownership Agreement (JOA) is expected to soon be executed between the Company's subsidiary Kenai Offshore Ventures, LLC (KOV) and AIDEA. The joint project has been named Project Endeavour.
The JOA contains 15 Conditions Precedent that must be finalized prior to draw down of the AIDEA investment. The Company considers 5 of the Condition Precedents to be Material Conditions Precedent and these are listed in Schedule 1. The Company is confident that all the Condition Precedents can be met in a timely manner.
AIDEA's involvement and investment is as a Preferred Owner of the jack-up rig with an initial 85.7% interest in the Joint Project. KOV will be the sole Common Owner with a 14.3% initial interest in the Joint Project.
The following are the main features of AIDEA's Preferred Ownership interest:
The Company anticipates that the total cost of the acquisition, modification and mobilization of the jack-up rig to the Cook Inlet from its current location will be approximately US $85.0 million.
Exclusive Use Rights
Buccaneer will have the first right of refusal to utilize the rig until the conclusion of the 2013 drilling season i.e. November 2013. Under the terms of the JOA Buccaneer has committed to drilling a minimum of 4 wells in the Cook Inlet using the acquired jack-up rig.
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