Buccaneer agrees on asset sales related to operations offshore Alaska

Offshore staff

HOUSTONBuccaneer Energy Ltd. has provided updates on recent transactions involving asset sales related to its operations offshore Alaska. The company has executed a sale and purchase agreement with BlueCrest Energy for the sale of its 25% interest in the Cosmopolitan project located offshore Alaska. Total consideration raised for the company by the sale is $41.25 million, inclusive of the repayment of a $1.25 million bond.

As part of the transaction, BlueCrest has executed a rig-assignment agreement to use the Endeavour jackup rig for a minimum of 150 days. BlueCrest has agreed to a minimum daily rate of $175,000 per day, and will lodge a letter of credit (LOC) in favor of Buccaneer for $5 million to underwrite its use of the Endeavour. Settlement is expected to take place in mid-January.

Buccaneer has also executed a membership interest purchase agreement with Teras Investments Pte. Ltd. for the sale of its 50% equity interest in, and its subordinated shareholder loans to, Kenai Offshore Ventures LLC (KOV) for $23.95 million.

KOV owns the Endeavour operated by the company in the Cook Inlet under a bare boat charter with Buccaneer’s wholly owned subsidiary, Kenai Drilling LLC. Buccaneer will continue to operate the Endeavour subsequent to the sale, with no material changes to the existing bare boat charter. This transaction enables Buccaneer to sell its ownership in the rig while maintaining control of the asset for its drilling operations in Alaska.

Sale proceeds will be used to repay unsecured loans of $11.2 million that are due Jan. 25 and for working capital purposes. The sale price represents 100% of the equity and loans that the company has invested into KOV since the acquisition of the Endeavour in late 2011 and its subsequent refurbishment. Settlement of the sale is expected to be finalized in mid-January.

01/06/2014

 

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