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NEWS BULLETIN

November 22, 2010 --- Vol. 16, No. 107November 2010

Buccaneer gets further approval from AIDEA

Buccaneer moved two steps closer to bringing a jack-up into Cook Inlet today.

The Alaska Industrial Development and Export Authority agreed to consider owning a piece of the rig and determined that the project was eligible for tax-exempt financing.

Buccaneer Alaska, a local subsidiary of the Australian independent, is looking to buy a jack-up rig by interlocking a series of public and private funding mechanisms.

To buy the rig, Buccaneer wants to use up to $60 million of Recovery Zone Facility Bonds and wants AIDEA to invest between $20 million and $30 million. Then, to offset those costs, Buccaneer would take advantage of a new tax credit that pays 100 percent of the drilling expenses, up to $25 million, for the first offshore well drilled with a jack-up.

The AIDEA board approved two resolutions that advance that cause today.

The first allows AIDEA to conduct a feasibility study to decide whether owning a portion of the rig is a good business decision. The second allows Buccaneer to get reimbursed for certain expenses if it is ultimately allowed to use the Recovery Zone Facility Bonds.

AIDEA could make a final decision as early as Dec. 3.

See story in Nov. 28 issue, available to subscribers online at noon, Friday, Nov. 26 at www.PetroleumNews.com

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