Buccaneer's 50% owned subsidiary Kenai Offshore Ventures (KOV) has overnight in London completed the acquisition of the GSF Adriatic XI offshore jackup rig from Transocean.

The total purchase price of the Rig was US $68.5 million funded through:

•A Senior Debt Facility with Oversea-Chinese Banking Corporation ("OCBC") of US $44.0 million; •A Preferred Interest investment from the Alaska Industrial Development and Export Authority ("AIDEA") of US $17.6 million with a fixed annual dividend of 8.0% per annum; with •The balance of the purchase price of US $6.9 million was paid by KOV with equal contributions from Buccaneer and Singapore-based Ezion Holdings Limited. These funds were paid as the deposit for the Rig in September 2011. KOV anticipates over the over the next 5 years both the OCBC and AIDEA facilities will be fully repaid by revenues received under the Bare Boat Charter agreement.

Coinciding with settlement the name of the Rig has been changed to "Endeavour – Spirit of Independence" ("Rig" or "Endeavour").

Buccaneer Director Dean Gallegos said, "With completion of this transaction, we have achieved what was initially considered by some, to be a very ambitious goal - to acquire an offshore jackup rig.

"This significant milestone for Buccaneer marks the start of the very tangible steps toward unlocking the value of our Alaskan offshore assets which Netherland, Sewell & Associates has estimated to be 73.3 MMBOE in combined 2P Reserves and P50 Resources. We are well on that path with mobilization to the Cook Inlet on track for April/May 2012.

"Furthermore the Endeavour represents a strategic asset, ensuring Buccaneer will feature predominantly in the "renaissance" of exploration activity in the offshore waters of Alaska."

The Endeavour is currently alongside Keppel shipyard in Singapore in preparation for the commencement of shipyard work that will include:

•Bringing the Rig back into operation after being cold-stacked; •Improvements to the crew quarters; and •Modifications to "winterize" the Rig for Alaskan conditions. The aforementioned work will not include any significant structural work.

The costs of the shipyard work and mobilization to the Cook Inlet will be funded by additional draw downs from both OCBC and AIDEA, taking these facilities to US $56.0 million and US $23.6 million respectively.

Tags: Buccaneer Energy Ltd.