About Buccaneer

The Company has a large existing portfolio and disciplined acquisition strategy focused on opportunities with:

• High working interests (WIs);
• Lost-cost, low-risk, previously developed properties, frequently with proved undeveloped reserves (PUDs) and significant potential for reserve growth and exploration upsides;
• Rapid revenue generation and payback (i.e. operationally simple based on existing infrastructure and favorable work environment).

Buccaneer’s management team has a proven track-record of finding and exploiting oil and gas reserves and generating new opportunity deal flow in the GoM Shelf.

Results to date have been very satisfactory. Buccaneer was EBITDAX profitable in the first two years of operation, recording profits of AUD$2.4 million in FY 2008 and AUD$4.1 million in FY 2009.

Business approach

Buccaneer aims for high operating efficiencies based on low corporate overhead, preferred access to oilfield equipment and services and a high degree of flexibility in scheduling drilling and development.

The Company’s aim is to fully exploit a market characterised by few significant competitors and small producers that are unable to generate the prospect inventory, maintain operational efficiency or attract capital necessary to optimally acquire and exploit mature GoM Shelf fields.

Based on this approach, Buccaneer has rapidly assembled an exceptionally large portfolio of low-cost, low-risk, drill-ready assets that currently includes approximately seven blocks (and partial blocks) on the GoM Shelf, five of which have PUDs.

Identifying opportunities

Buccaneer’s innovative strategy is to identify and exploit reserve opportunities that other operators rarely see. The approach recognises that in a tight hardware and resource market, profits can be generated from resources previously considered uneconomic.

Frequently, the difference between success with a hydrocarbon venture and total loss of an opportunity may be the availability of scarce services or elusive hardware. Buccaneer Energy has negotiated arrangements with various preferred suppliers to ensure that sought after services and the necessary investment capital can be brought together to enter commercially attractive equity opportunities with existing operators and bring prospects to market.

Typical scenarios include properties which are not being developed at all or where development is being significantly delayed by drill rig shortages. In other examples, service personnel and capabilities are not available. While the needs vary from prospect to prospect, the opportunity is the same: when you bring input capital plus scarce services to a project, commercially attractive equity becomes available.