BUCCANEER ENERGY LIMITED. 
By Buccaneer Energy Limited ("Buccaneer" or "the Company") is pleased to advise that it has executed binding agreements to sell certain assets and lower operating expenses. The details are as follows:
Sale of Cosmopolitan Project
The Company has executed a Sale and Purchase Agreement with BlueCrest Energy Inc. ("BlueCrest") for the sale of its 25% interest in the Cosmopolitan project. Total consideration raised for the Company by the sale is US$41.25 million, inclusive of the repayment of a US$1.25 million bond.
The Company acquired its interest in the Cosmopolitan project in August 2012, and to date has expended approximately US$9.0 million. This amount is inclusive of acquisition costs and costs associated with the drilling of the Cosmopolitan State # 1 well, net of ACES rebates.
As part of the transaction, BlueCrest has executed a Rig Assignment Agreement where it has agreed to use the Endeavour jack-up rig for a minimum of 150 days comprised of 50 rig working days during each of the following "Winter Seasons" extending from 16 November 2013 to 15 April 2014, 16 November
2014 to 15 April 2015 and 16 November 2015 to 15 April 2016.
BlueCrest has agreed to a minimum daily rate of US$175,000 per day, and will lodge a Letter of Credit in favour of the Company for US$5.0 million to underwrite its use of the Endeavour. The LOC will remain in place until BlueCrest has used the Endeavour for a total of 150 days.
The sale gives the Company the opportunity to monetise 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.
Settlement is expected to take place in mid-January 2014.
The Company has executed a Membership Interest Purchase Agreement ("MIPA") 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 US$23.95 million, inclusive of intercompany trade payables and trade receivables.
KOV owns the Endeavour jack-up rig operated by the Company in the Cook Inlet of Alaska under a Bare Boat Charter agreement with Buccaneer's wholly owned subsidiary, Kenai Drilling, LLC, which expires on 29 October 2017. The Company will continue to operate the Endeavour jack-up rig subsequent to the sale of the Company's interest in KOV with no material changes to the existing bare boat charter agreement. This transaction realizes a stated goal of the Company to sell its ownership in the rig while maintaining control of the asset for its drilling operations in Alaska.
Proceeds from the sale will be used to repay unsecured loans of US$11.2 million that are due on 25
January 2014 and for working capital purposes.
The sale price represents approximately 100% of the equity and loans the Company has invested into
KOV since the acquisition of the Endeavour in late 2011 and its subsequent refurbishment.
www.buccenergy.com
Level 9, 25 Bligh Street
SYDNEY NSW 2000, Australia
T: +61 2 9233 2520 F: +61 2 9233 2530
ABN: 63 125 670 733
11200 Westheimer, Suite 900
HOUSTON, TEXAS 77042, USA
T: +1 713 468 1678 F: +1 713 468 3717
Settlement of the sale is conditional upon the consent of the Alaskan Industrial Development and
Export Authority ("AIDEA"), and is expected to be finalised in mid-January 2014.
The Company has executed a loan agreement with an affiliate of Meridian Capital International Fund ("Meridian") to lend the Company US$6.0 million (the "Loan"). Meridian currently holds an 18.9% interest in the Company and has a representative on the board. The Loan is to be used by the Company to fund various costs associated with operations. The Loan is to be repaid by 31 March 2014 and will be repaid from the proceeds of the proposed rights issue (see below) or the Cosmopolitan sale (if the rights issue has not been completed by 31 March 2014 and subject to certain requirements being met). If the rights issue has not been completed and the Loan has not been repaid by 31 March
2014, in addition to interest charges, a 25% late repayment fee will apply.
The Company has agreed in certain circumstances to grant Meridian a second lien over the Company's assets to secure the Loan, subject to obtaining the necessary ASX consent and where required, shareholder approval. The Company has also granted Meridian a first right of refusal with respect to the sale of any assets belonging to the Group for a period of 12 months.
In addition to the above Loan, the Company has executed a non-binding Letter of Intent ("LOI") with
Meridian to provide an additional credit facility of up to US$50 million (the "Facility").
The Company currently has the following facilities with Chicago based Victory Park Capital:
