NEWS BULLETIN

March 30, 2011 --- Vol. 17, No. 27March 2011

AIDEA to vote on jack-up purchase Friday

The Alaska Industrial Development and Export Authority could be close to investing up to $30 million to buy a jack-up rig for use in Cook Inlet as soon as this summer.

The public corporation posted details of the proposed deal on its website today.

As written, the deal would allow AIDEA to enter into an agreement with Kenai Offshore Ventures, Buccaneer Energy and Ezion Holdings to purchase and operate a jack-up rig.

Buccaneer, an Australian independent with onshore and offshore leases across the Cook Inlet basin, created Kenai Offshore Ventures last year to operate a proposed offshore drilling operation in Alaska. Ezion Holdings is a marine transportation company.

Under the proposed deal, Buccaneer and Ezion would contribute at least $5 million in return for a stake in KOV. Ezion would also loan KOV about $3.3 million, or enough money to fund three months of debt service on the additional loans taken out to fund program. Buccaneer would also commit to drill four wells in Cook Inlet with the rig.

With the entire program estimated to cost between $80 million and $90 million, the companies could be looking to borrow as much as $55 million on top of AIDEA funding.

The proposed agreement requires that AIDEA recoup its investment within six years.

See story in April 3 issue of Petroleum News, available online by 11 a.m. Friday, April 1, at www.PetroleumNews.com


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