Buccaneer Updates Kenai Loop Project

Buccaneer Energy Limited is pleased to provide further details on its recently leased Kenai Loop Project. Kenai Loop is an onshore gas play located in the eastern Cook Inlet Basin in the northern part of the Kenai Peninsula near the city of Kenai.

The management team of the Company’s wholly owned subsidiary Buccaneer Alaska had been aware of the potential of the area for some time and the Company commenced leasing activities to secure the acreage in July 2010. The Company has acquired 100% working interest (80% to 86.5% net revenue interest) in approximately 7,734 acres from multiple landowners.

Features of the Kenai Loop Project are as follows:

Lies on a ridge between the Kenai Cannery Loop field (175 BCF gas production) and Beaver Creek oil and gas field (6 million barrels oil and 205 BCF gas production);

Seismic amplitude anomalies in the same productive intervals as the above fields;

Several control wells and 200 miles of 2D seismic data were used to map Kenai Loop and, similar to the surrounding fields, there are multiple stacked pay zone possibilities between 5,000 and 10,000 feet;

Resource potential per well is 5 BCF gas and the in-house estimated reserve range is between 35 - 78 BCF gas with most likely reserves of 52 BCF gas. Initial rates per well are estimated to be in the 5 to 10 million cubic feet per day range;

Three drilling locations are in the process of being permitted;

The first well will be a step-out well from the Kenai Cannery Loop field and is targeted to spud in late February, subject to confirmation of rig availability;

3 miles to the nearest gas sales pipeline;

Drilling and completion costs are estimated at approximately $7.0 million gross and $2.5 million after the ACES cash rebate;

Strong local market for gas in the area, recent gas contracts have a US$7.00 / MCF floor and US$10.00 / MCF ceiling.