Buccaneer sells its holdings in Cosmopolitan, Cook Inlet jack-up rig
Buccaneer Energy, the Australia-based independent, has sold off some of its Alaska assets to finance its further work in Cook Inlet, the company announced in a press release Jan. 2.
The company will sell its 25 percent share in the offshore Cosmopolitan oil and gas project in Alaska’s Cook Inlet to Texas-based independent BlueCrest Energy Inc., Buccaneer said in the press release. BlueCrest will own 100 percent of Cosmopolitan after the sale closes.
Buccaneer, as operator at Cosmopolitan, drilled an exploration well at Cosmopolitan in 2013 and made a natural gas discovery. Pioneer Natural Resources, which previously owned the asset, had also confirmed an oil discovery at deeper reservoir intervals, and Buccaneer’s plan was to follow up on tests of the deeper oil formations.
BlueCrest will pay $41.25 million for Buccaneer’s 25 percent interest. Buccaneer has invested $9 million as its share of costs at Cosmopolitan.
“The sale gives the company as opportunity to monetize an asset in which it holds a minority interest at a significant premium to its sunk costs. The sale price is within acceptable market parameters for undeveloped projects of this type in Alaska,” said Curtis Burton, Buccaneer’s Managing Director, in the press release.
The sale is expected to close in mid-January.
Buccaneer also said it will sell its 50 percent share in Kenai Offshore Ventures, owner of the Endeavour jack-up rig now in Cook Inlet, to Teras Investments Pte. Ltd. of Singapore, for $23.95 million.
Tera is a subsidiary of Ezion Holdings, Ltd., also of Singapore. Ezion is already a 50 percent partner with Buccaneer in the Endeavour rig, so the sale will have the Singapore company own 100 percent of the Endeavour.
Buccaneer will continue to operate the rig, however, under a contract that expires in 2017 to charter the rig for drilling.
The Alaska Industrial Development and Export Authority, the state of Alaska’s development finance corporation, also has a stake in the rig through a preferred stock position in a financing arrangement agreed to in 2011. AIDEA’s shares are to be acquired by the other rig owners, now Ezion only, so the authority’s financing is essentially a loan.
Buccaneer will use the proceeds of both sales to provide working capital and to repay loans.
The sale to BlueCrest is expected to close in January, after which BlueCrest will assume management of further drilling that is planned at the Cosmopolitan oil and gas prospects.
The Endeavour rig for has been contracted delineation drilling at the Cosmopolitan this winter and three other Cook Inlet offshore prospects still owned by Buccaneer. Those include “Tyonek Deep,” or deep oil prospects in the North Cook Inlet gas field owned and being produced by ConocoPhillips, and where Buccaneer has an agreement to test the deep parts of the field; Southern Cross and North West Cook Inlet.
The Endeavour is now in winter storage at Port Graham.