NEWS BULLETIN

October 19, 2010 --- Vol. 16, No. 92October 2010

Buccaneer to ask AIDEA, Kenai for jack-up funds

Buccaneer Alaska is in the hunt for a jack-up rig.

Executives from the local subsidiary of Australian independent Buccaneer Resources met with leaders from across the Kenai Peninsula on Oct. 14 to discuss plans for the region, including a well near the Kenai Municipal Airport and the company’s plans to ask the Alaska Industrial Development and Export Authority for a loan to bring a jack-up rig to Alaska.

Buccaneer could request the loan through two channels. It could either ask for a traditional AIDEA loan, or it could ask AIDEA for federal economic stimulus money.

“We are in discussion with AIDEA and some other groups concerning the funding for a jack-up rig,” Mark Landt, vice president of land and administration for Buccaneer Alaska, told Petroleum News today. Landt said more information about the proposal should be available soon, as applications for stimulus funds must be made by Nov. 8.

The Kenai Peninsula Borough received $7.315 million from the American Recovery and Reinvestment Act of 2009, and transferred some of that to the City of Kenai, but didn’t use the full allocation. The unused portion returned to the State, and is held by AIDEA.

On Oct. 20, the Kenai City Council will consider a resolution to support using those unused funds to help Buccaneer Alaska “and possibly other companies” get a jack-up rig.

The Kenai Peninsula Borough is expected to consider a similar resolution on Oct. 26.

A jack-up rig is a mobile unit for drilling in relatively shallow offshore areas, like the waters of the upper Cook Inlet. Companies have been trying unsuccessfully for years to bring a jack-up rig to Alaska, because the rig is considered crucial for exploring and developing several offshore areas. Those include Buccaneer’s proposed Southern Cross and North West Cook Inlet units, and Escopeta Oil’s Kitchen Lights unit.

As a way to spur development, the Alaska Legislature earlier this year passed a bill that included major tax credits for the first three offshore Cook Inlet wells with a jack-up rig.

See the full story in the next edition of Petroleum News, which will be available online to subscribers at noon on Friday at www.petroleumnews.com.


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