NEWS BULLETIN

February 02, 2012 --- Vol. 18, No. 7February 2012

Buccaneer picks up two leases at Cosmopolitan

Buccaneer Energy Ltd. is buying two leases at the Cosmopolitan prospect off Southcentral Alaska’s Kenai Peninsula from Pioneer Natural Resources Alaska.

Buccaneer said in a release dated today that the acquisition is being jointly made with privately owned Fort Worth, Texas-based BlueCrest Energy II LP, with Buccaneer acquiring a 25 percent working interest and BlueCrest a 75 percent working interest.

Buccaneer will be the operator. The acquisition closes March 30; terms are confidential.

Pioneer was formerly the operator at Cosmopolitan, but in January 2011 the company voluntarily terminated the unit, keeping only the two leases with wells certified as cable of producing oil in paying quantities.

The State of Alaska offered the available state leases, with special terms on three tracts adjacent to the Pioneer leases, terms which required acquisition of the tracts as a block and a commitment to delineation drilling. Those adjacent tracts were acquired by Houston-based independent Apache Corp. in the state’s June Cook Inlet lease sale.

In its release on the acquisition, Buccaneer Director Dean Gallegos said the acquisitions provides substantial benefits for Buccaneer, “significantly” increasing the company’s oil and gas reserves and increasing opportunities for the company’s jack-up rig, the Endeavour, due to arrive in Cook Inlet in mid-2012.

Buccaneer said shallow gas at Cosmopolitan can be drilled with the jack-up rig, while deeper oil at Cosmo would be directionally drilled from shore. The discovery well was drilled in 1967 from a jack-up; wells drilled by Phillips Alaska Inc. (later ConocoPhillips Alaska) in 2001-02 and 2003 were drilled from shore, as was a sidetrack drilled by Pioneer in 2007.

—Kristen Nelson

Calgary-based AltaGas buying Enstar

Enstar Natural Gas Co., Southcentral Alaska’s natural gas distribution company, is on its way to having a Canadian owner.

Calgary-based AltaGas Ltd. said yesterday that it will pay more than $1.1 billion for natural gas businesses in Alaska and Michigan. The acquisition of Semco Holding Corp. includes Semco Energy Inc. in Port Huron, Mich., Enstar and an interest in Cook Inlet Natural Gas Storage Alaska LLC.

AltaGas said the transaction is subject to customary approvals, expected to take about six months, and including regulatory approvals from the Michigan Public Service Commission, the Regulatory Commission of Alaska and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“AltaGas’ vision is to be a leading North American energy infrastructure company. This acquisition continues the successful execution of our growth strategy,” said David Cornhill, AltaGas chairman and CEO, in a Feb. 1 statement.

“These assets come with strong management teams and employees who have a strong record of delivering safe and reliable service to their customers and have excellent relationships with the communities in which they operate,” he said, adding that AltaGas looks forward to welcoming Semco management teams to AltaGas.

“We have a long history of operating natural gas utilities, and we will continue to delivery safe and reliable service to our customers,” Cornhill said.

The message was the same in Alaska.

“Enstar will continue to provide the same safe and reliable service relying on the same personnel, working from the same offices, doing the same work they do now,” Enstar’s director of corporate communications and customer service, John Sims, told Petroleum News Feb. 1.

“Colleen Starring will remain as president of Enstar Natural Gas and we really expect it to be a smooth transition,” Sims said.

—Kristen Nelson

See stories in Feb. 5 issue, available online at 11 a.m., Friday, Feb. 3 at www.PetroleumNews.com


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