Buccaneer to raise $13.9m

by on July 18, 2012 4:31 am BST

The company will issue 292,682,927 shares at A$0.041 each to raise a total of A$12 million, and implement a share purchase plan to eligible shareholders capped at A$1.5 million, at an issue price of A$0.041.

The placement will be completed in two tranches, the first of which has been undertaken.

The second tranche is expected to be completed late next month.

Along with its existing project finance facility, Buccaneer plans to use proceeds from the capital raising to drill its second well at its onshore Kenai Loop project and support its Cook Inlet offshore exploration programme in Alaska.

Buccaneer director Dean Gallegos said in a statement that the company’s initial focus would be on maximising production delivery of the Kenai Loop onshore gas field.

“To optimise [Buccaneer’s] capital expenditure programme, offshore exploration will be phased to follow the development of its onshore Kenai Loop project,” Gallegos said.

The company also planned to fund the completed acquisition of a 25% working interest in the Cosmopolitan project in the south-east Cook Inlet, and contribute additional equity to Buccaneer’s 50%-owned subsidiary, Kenai Offshore Ventures, to finalise the modifications and upgrades to its jack-up rig, Endeavour.

“To reduce operational expenditure while the company focuses on its Kenai Loop development, the company will seek to contract out the recently-acquired Endeavour jack-up rig to third party operators,” Gallegos said.

Buccaneer has been producing and selling gas from its Kenai Loop-1 well since January.

The project has been independently assessed to contain proven and probable reserves of 4.8 million barrels of oil equivalent.

Buccaneer believes that full development of the Kenai Loop field could exceed 10 producing wells.