Kenai Offshore Ventures, LLC (KOV) has executed a heavy lift contract to transport the Endeavour, Spirit of Independence (300' ILC) from Singapore to the Cook Inlet, Alaska. The Endeavour is expected to depart Singapore at the end of July 2012 and it will take approximately 21 days to reach the Cook Inlet, where the rig will be offloaded and towed via tug to the first well location in Buccaneer's offshore program.
On completion of the 2012 drilling season anticipated to be in early November it is anticipated that the rig will be towed to the Cosmopolitan location in the ice free southern Cook Inlet to commence drilling operations.
As previously advised the Company's part owned subsidiary Kenai Offshore Ventures, LLC executed a Repair Contract with Keppel FELS Shipyard in Singapore for the repair and modification of the jackup rig, Endeavour. Substantially more work than originally scheduled for the Singapore shipyard period has now been completed including the following:
The above additional work required resulted in a budget increase and approximately $2.5 million of the funds raised from the recently announced capital raising will be used to satisfy Buccaneer's obligations to that joint venture company.
KOV is also putting in place additional financial arrangements that require no additional lump sum payment from Buccaneer, to facilitate this Buccaneer has agreed to an increase in the Bare Boat Charter fee 15 - 20 percent. The Bare Boat Charter fee forms part of the day rate Buccaneer will be charging to itself and third parties and which is subject to a 65.0 percent cash rebate from the Alaskan State Governments ACES incentive program.
In addition to its 3 onshore Cook Inlet projects the Company also has three projects located offshore Cook Inlet, Alaska.
All of these projects have independent assessed reserves and resources by respected US based engineering firms as follows:
Certified Offshore Reserves and Resources (MMBOE)
Buccaneer is the Operator for all of the above projects.
The Endeavour jackup rig was selected following a rigorous global search process. Its existing capabilities make it suitable for most water depths that exist in the Cook Inlet and northern Alaskan waters.
These capabilities include:
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