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Buccaneer Energy Limited (ASX:BCC) Kenai Loop Progress Report

Buccaneer Energy Limited (“Buccaneer” or “the Company”) is pleased to provide the following update on the progress of the Kenai Loop # 1 well:
Time: 9.00am (Sydney) 10 May 2011 / 3.00pm (Anchorage) 9 May 2011.
Depth: 10,680 feet Total Vertical Depth (“TVD”)
Activity: Drilling completed to 10,680 feet. Wire line logging operations underway.
Results: Since the intermediate casing at 8,024’ the well has been deepened to 10,680’ TVD (Total Depth). Mud logs have identified 11 intervals within the Upper Tyonek, totalling approximately 355’, as exhibiting characteristics warranting further testing.
Of these 11 intervals, 3 intervals totalling approximately 135’ have been high graded as significant or very significant shows. These intervals are gas shows which exhibited either moderate visible porosity, were in massive sandstones or were unconsolidated sandstones.
One of the unconsolidated sandstone intervals totalling 60’ was associated with a “gas kick” with an immediate and significant increase in pressure, recorded gas units were >2000 units and C1 – C4 gases were detected.
Wire line logging is expected to take 48 - 72 hours to complete after which casing will be run. On completion of casing the Upper Tyonek, a total of up to 10 zones from the Beluga and Upper Tyonek Formations will be selected, from the 16 zones identified, and perforated for flow testing. The Company has 10 perforation guns on site but as there are more than 10 zones of interest, not all zones will be tested. Flow testing of the identified zones will commence in approximately 7 days.

Massive sandstone indicates a relatively thick, uniform, not laminated, sandstone; possibly a channel type of sand with typically very good reservoir characteristics. Unconsolidated sandstones indicates a sand that was not or is no longer cemented and typically very good reservoir characteristics.
The closest wells to the Company’s Kenai Loop # 1 well are the Cannery Loop # 3 and # 4 wells located in the Cannery Loop Field, which were drilled from the same surface location approximately 6,325 feet (1.2 miles) from the Kenai Loop # 1 well location.
The Cannery Loop # 3 and # 4 wells have produced a combined 25.5 BCF from pay zones whose equivalents are expected to be present in the Kenai Loop # 1 well, but separated from the Cannery Loop Field by geological deposition rather than fault. Drilling to date in the Kenai Loop # 1 well has confirmed that the formations encountered to date are likely separated from the Field.
There were 11 wells in the Cannery Loop Field. One well produced from the Sterling Formation which is not one a target in Kenai Loop # 1 well, the other 10 wells produced from the Beluga and Upper Tyonek. The Upper Tyonek is the primary target Formation of the Kenai Loop #1 well.
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