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NEWS BULLETIN

November 15, 2010 --- Vol. 16, No. 102November 2010

Buccaneer gets one step closer to rig funding

The Alaska Industrial Development and Export Authority allocated $60 million in Recovery Zone Facility Bonds to Kenai Offshore Ventures LLC today.

The decision sets the stage for the company to buy a jack-up rig for Alaska.

Kenai Offshore Ventures is a consortium created by Buccaneer Alaska, the local subsidiary of the Australian independent Buccaneer Resources. Buccaneer wants to buy the mobile drilling unit and lease it to companies looking to drill offshore wells in Cook Inlet, an underexplored part of the basin believed to have undiscovered oil and gas fields.

The ruling only allocates a portion of the remaining bonding authority for Kenai Offshore Ventures. For the company to actually get the money, the AIDEA board of directors must pass a resolution agreeing to issue the bond. That vote is scheduled for Dec. 3.

Recovery Zone Facility Bonds, or RZFBs, are a tax-exempt bond included in the American Recovery and Reinvestment Act of 2009, also known as the stimulus package.

The bonds gave local municipalities, particularly those in economic distress, a way to offer tax-exempt funding to businesses looking to invest within the community. Because some of the most economically distressed areas in Alaska are not within a recognized municipality, though, the state charged AIDEA with allocating and issuing the bonds.

See story in the Nov. 21 issue, available online to subscribers at noon, Friday, Nov. 19, at www.PetroleumNews.com

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