Buccaneer Energy Ltd. has closed on a farm-out agreement designed to fund much of its Cook Inlet exploration commitments, the Australian company announced yesterday.
Under the deal, the California-based independent EOS Petro Inc. will fund six wells in return for a 50 percent stake in as many as four Buccaneer-operated prospects.
The deal requires EOS Petro to pay for two wells each at the onshore West Eagle unit, the offshore Southern Cross unit and the offshore North Cook Inlet unit. ConocoPhillips operates North Cook Inlet, but Buccaneer recently farmed-in the deep oil rights at the legacy natural gas field. The deal also includes an option for EOS Petro to fund two wells at the Buccaneer-operated North West Cook Inlet unit, in return for a 50 percent stake.
The program is expected to cost between $150 million and $200 million.
The arrangement requires EOS Petro to use the Endeavour jack-up rig for offshore wells and Glacier No. 1 rig for onshore wells. Buccaneer currently has both rigs under contract.
The Endeavour rig is headed for Southern Cross within days.
The Glacier rig is currently drilling at the onshore Kenai Loop field.
See more in Sept. 1 issue, available online at 11 a.m., Friday, Sept. 30 at www.PetroleumNews.com