Buccaneer updated the progress of the acquisition of a jack-up rig for operations in the Cook Inlet, Alaska.
Buccaneer is in the process of negotiating and financing the acquisition of a jack-up rig that will have the capacity to operate in all areas within the Cook Inlet as well as the Beaufort Sea and Chukchi Sea off the North Slope of Alaska.
Given some of the existing oil and gas fields within the Cook Inlet are located in waters up to 300' in depth, the jack-up Buccaneer is seeking to acquire has the following features:
Able to operate in waters up to 300' in depth;
Capable of drilling wells to 25,000';
Will have -10 degree rated steel allowing it to work in the wide environmental envelope that exists in the Arctic;
Has a large deck area and variable deck load so it is able to store tubulars (casing) for deep drilling operations;
The proposed rig is equipped with piping for a 15,000 PSI blow out protector (BOP) system; the Company has negotiated the inclusion of a 15,000 BOP as part of the acquisition. Thus it has the capacity to easily upgrade its BOP so as to allow drilling high pressure locations that exist in the Cook Inlet; and
Is cold stacked in an Asian location so has no requirement to obtain a Jones Act Waiver to mobilize to the Cook Inlet.
The acquisition of the jack-up rig and mobilization to the Cook Inlet is anticipated to generate up to 400 direct and indirect jobs in the Cook Inlet region. This will create a significant economic boost and increase in tax base at a time when the region is feeling the effects of an economic down turn.
Mobilization & Permitting
Buccaneer is applying for all permits necessary to drill four offshore wells in Cook Inlet, with all approvals expected by the end of May 2011. The Cook Inlet wells include two at its North Middle Ground Shoal (Southern Cross Unit) and two at North West Cook Inlet.
The longest lead time involved with permitting was modifying Buccaneer's existing Air Quality Permit. Modifying the existing permit required extensive air quality modeling due to locations of the four wells and size of the jackup. Submittal of the application for the permit modification will occur this week, with approval expected by the end of May 2011 following a required regulatory review period.
The Buccaneer rig will be moved to Alaska from a foreign port thus eliminating a need to obtain a Jones Act Waiver from the US Federal Government. This waiver is necessary only if the rig to be transported begins and ends its journey in a US port and is transported by a foreign flagged vessel.