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Takeover?? Hey, has anyone else been reading what is going on in Australia. Apparently a couple of investors that own 8% of the company are getting serious about making a run for the company. Pretty amazing that that is even possible.
Lots of delays... problems with the 21" BOPs that they rent from Weatherford... Unable to get a good test on the 13.375" casing rams - this resulted in several days worth of non-productive time. They should be cementing 13.375" casing sometime today, assuming that they have not run into other issues. Problems like this, delays, non-productive time are all part of bringing a new rig (or an old re-worked rig) online...
The good news is that the state of Alaska is paying for half of the well as an incentive to spark more exploration in their state. Because, Buccaneer owns the rig and don't have to pay a $160K/day rate for it, then as long as one half of the daily sum of Buccaneer's 3rd party service charges don't exceed half of an estimated $160K (the estimated rig rate)... then Buccaneer comes out on the plus side... When you take all of this into consideration, it really doesn't matter how long it takes to drill the well because in the end, Buccaneer will be getting their hands on a free well-bore...
Deep Down,
I think the "blogosphere" probably has some idea of what is going on, but they are looking at this through the eyes of Australia.
Houston is a long way from Alaska, but that is the Energy Capital of the United States. If you look at the players in the Cook Inlet. Marathon is head quartered in Houston, Apache is headquartered in Houston, Hilcorp in Houston, ConocoPhilips in Houston. Even Escopeta/Furie is in Houston. The major service groups, Haliburton in Houston, Schlumberger in Houston, Spartan in Louisiana, Armstrong in Colorado, etc.
The main reason to be in Houston is that is where the older, better experienced people are. They did their time up there and moved to the lower 48.
I guess it is kind of like seeing companies headquarter in Perth but work all over the World. The strength of BCC has always been an ability to get things done in market without having to hire hundreds of bodies. A trend which has just changed if you look at the website the staff has jumped from 12 or 13 to over 30 and a bunch of them are in Alaska or travel back and forth.
I think we need to be looking at whether the team in Houston can move their program forward. I am looking for a spud date on KL 2. Not because it makes a huge difference but because they said they would do it. I am looking for positive results at Cosmo and a quick mob to Southern Cross.
These things matter, where the HQ is simply doesn't. If you want to close an office I would close Anchorage. Juno is the capital and Kenai is the operational office. So who's in Anchorage?
In reading the Hotcopper blog, which covers Buccaneer Energy extensively, I can really tell that they have Buccaneer Fatigue. One poster was suggesting that they shut down the Houston and Dallas office and sell all their Texas assets.
I had to chuckle, since the entire first and second level management team live in Houston and the new GEO team lives in Dallas and only the rough necks are in Alaska. This shows me that the blogosphere are missing the boat when it comes to Buccaneer.
All the history aside, all the issues with the economy, all the issues with the financing are finally coming to an end and the guys on this blog want to chuck the current management and replace them with a group that has never been to Alaska.
If you do that you will put the company into “freeze” mode. If the plan is to close the Houston office and move everyone to Kenai Alaska you probably lose most of your local management. For goodness sake, even Dave Duarte lives in Houston. So does Mark Landt, Jim Watt, Curtis Burton and Andy Rike, head of operations all live in Houston.
No one would be that stupid, that is why buying now makes sense. They are about to raise more money at 4 cents, the price is 3.7 now and the analysts think this could be a 10-cent or better stock.
History is good, but it is no indication of future performance, everyone remember that one. Now is the time for BCC, the offshore program has begun, KL is being proved up, other projects are about begin (west eagle) and this one is about to light up.
Or the shareholders are going to vote in a new board and this one is going to go to zero. We will see more delays, people leaving the company and a world of hurt. So not to beleaguer a point but we either have a winner that is just leaving the gate or we are going to shoot the nag for breaking her leg before she is put in the starter.
Well, that is debatable. First those prices only occur in the winter months and it remains to be seen the affect Hilcorp will have on the gas market now that they own the Marathon assets. Second, anytime you are encouraging independents to come and drill you must provide a robust market.
Alaska currently provides the initial incentives. Strong local market, ACES rebates on exploration, an ever improving permitting situation. But to make the market truly stable a robust future market needs to be planned for.
The maritime highway needs to be converted to natural gas, the LNG plant must remain a viable option, the Fairbanks natural gas situation needs to be solved with a Cook Inlet solution instead of a North Slope solution. The fertilizer plant needs to be brought back into operation. With lots of market, incentives become less important and stable long term profits assure a robust local market.
So is LNG important, yes. Does it need to be working today...probably not. Is Parnell making the right moves, yes. Is he moving far enough, fast enough. Probably not.
prices you quote $22/mcf are short term winter only prices. They last for a few months. Japan is paying $14/mcf routinely while Buccaneer just announced that they are getting 6.80 for KL4 production from March to Sept 2013 after getting $6.19 for KL1 production up to 5mmcfpd. Seems like there is still financial incentive to export LNG IF the export plant is reactivated AND Buccaneer can demonstrate sufficient production to fill local needs(both residential and industrial)AND use more than a token amount of export plant capacity.
Given the current natural gas prices in Alaska (~$22/MCF) there is little incentive to export to Japan...
Permit expired, yes, mothballed not quite. COP is paying to keep the tanks cold and for a full staff to man it. Doesn't look like they have given up on it just yet.
They had to be pretty ticked when Hilcorp was told that they couldn't sell any gas to the LNG plant for five years after they bought Marathon.
There is even some talk out there that the state may step in and help renew the license. Bodes well for Buccaneer.
unfortunately that export plant is mothballed for now and it's permit has expired. Don't know how long it would take or what hoops they would have to jump thru to get the permit renewed.
Actually, the Cook Inlet is the home of the United States' only export terminal and it is owned by ConocoPhillips and services Japan. There was an article recently about Resource Energy having confidential agreements with Buccaneer and others to supply natural gas to Japan.
Just another reason that this stock looks good.
http://www.alaskadispatch.com/article/20130529/japan-wants-alaska-natural-gas-do-big-three-care
Article about Japanese interest in developing Alaskan LNG export capability to fulfill their increasing need for clean fuel after their nuke plant shutdowns.
Doesn't affect Buccaneer right now but could impact their market if the LNG export plant is built in Cook Inlet.
It seems others see what you see.
BBY http://www.bby.com.au/ just initiated coverage on BCGY BCC:ASX with a strong buy with a target at .14 cents My comments in parenthesis.
Valuation - with no placement, no drilling lease obligations, nor drilling assets we value BCC at .04share on current Kenai Loop production,(so basically if they stop now) and .06/sh on higher production post the next three fully funded wells. (drilling should commence shortly) The offshore drill rig hits the account in two ways, as Kenai Drilling, a business with exclusive use of the rig and obligation to pay the lease charge, and 50% of the rig owner (KOV). We see KOV as worth .02/sh to BCC and Kenai Drilling is worth another .O2/sh assuming on 250 days of drilling per year at 175k/day.. (so KL gives us .06 and KOV and KD give us .04 which equals .10.)
Add on Cosmo and they are off to the races. The report also acknowledges shareholder fatigue as being an issue. This means that buying at anything under .04 is a steal.
I like getting in when others don't see the opportunity. I feel for anyone who bought in at 21 cents, but hey that's the oil and gas business and now I am looking at buying signals with very little downside potential.
I like what Dean has done, the company is still here when a lot of others did dissappear. If they finally have the right operations team to execute on the strategy then this should take off. Did you see that the GEO and engineering crews have been beefed up... the operations guys are proliferating and it's is beginning to look like a real oil company.
All they need now is get to drilling!!
Agreed, shit happens, but assuming the management stays as is, as the company moves forward they are going to get some drilling done, that is going to increase their reserves and thus increase their borrowing base which will enable them to keep on drilling.
Maybe the company could then initiate a stock buy back program if the market doesn't take notice and reward them accordingly. That still puts upward pressure on the share price and that is good for anyone who gets in now. I like the analyst view that this is a 10 cent stock because at these prices that is a 3x your money.
Imagine what happens when the company really begins bringing in the cash. Then again we are trading in Australia and they obviously have other ideas about what success is. I like the Steve Ferris quote.
"we have a great company and have done a great job, but we have not done what we said we were going to do."
I hope the Buccaneer team can relay to the market now what is going on and how important it is, and then continue it - instead of making big promises, getting derailed, and then delivering after a year or two.
This happens, while they are doing lots of great work behind the scenes to stay alive and move forward that doesn't fulfill expectations. You would think they would be getting tired of the bad press by now.
If you look over the past, every time the economy or the industry shifts Dean has to go out and raise more money. If they can get these dollars in now, either from a placement or a cornerstone investor, they should be able to push this little oiler down the road a considerable way. If you look at the assets in place, the permits in place, the equipment in place, with that funding in place this one takes off.
Without it, we are great takeover prospect, so a new shareholder wins either way. Really why I am bothering at this point.
I think your right Deep Down, but "shit happens" in the oil business. Especially offshore. They said at the beginning of the year they intended to drill 7 wells. So far 1 new well has spud. So lets say they start a new well in Kenai in June... drilling season ends in November. Probably not going to get 7. This means that the market is going to see this drilling season as a failure and may not reward the stock.
Imagine what happens if the current board is voted out, that could literally add years onto a process that has all ready taken too long.
Yea, I hear you OilPatch can you imagine being told after you buy the leases that now that you have bought into the Inlet, great, but to make it work we need to go buy more stuff. Oh yea, we are going to need to source an offshore rig and we are going to need an onshore one as well. And by the way, we still really need to get more permits and spend more money.
Can you imagine how hard that must have been on Dean, constantly having to raise more money, working with AIDEA, working with EZION and now to have the EZION investors trying to take it away from him.
I saw in their presentation that have now spent over 100 million just getting to this point. They are not getting any credit for getting this far and this is the tipping point. That's why now is the time to get in.
It is hard to see how you are not going to least get your money back in a take over or get a significant upside if these guys get to continue. Over 340 million in reserves and they have only spent 100 to get there.
Jack up is drilling and Glacier Rig is getting ready.
Here is an article from 2011 on the Cook Inlet players, I found it on Hotcopper. http://www.petroleumnews.com/pntruncate/626847243.shtml
It's an interesting read. There were a lot of companies back then trying to get something done in Alaska and our guys Jim Watt, Mark Landt, and Dave Duarte were in the thick of it. Most of the companies are gone now. Forest pulled out, Pacific went bankrupt, Escopeta is no where to be found, Chevron is out, Marathon sold to Hilcorp. I bet Jim and Mark are very happy they ran into Curtis when they did. It looks like they were on there way out, having traded off their leases to Danny Davis. Amazes me that they could hold on so long, but it took Buccaneer entering the Inlet before they could move anything forward. Speaks a lot tot he experience Curtis has getting a team moving.
I meant future Canaccord articles might not be on Buc's site.
geopressure - Pg 8 from Canaccord - Another incentive specific to Alaska is the Jack-Up Rig Special Cash Rebate which offers further incentives to drill in the Cook Inlet. What this means is that for the first 3 wells drilled in the Cook Inlet ACES will offer the following cash payments
• 100% cost rebate for the first well drilled up to a cost of US$25.0m
• 90% cost rebate for the second well drilled up to a cost of US$22.5m
• 80% cost rebate for the third well drilled up to a cost of US$22.5m
We note that this is only applicable once per company with 50% paid within a year
with the remainder repayable over 10 years.
I have access to Canaccord reports on an ongoing basis and usually the company they research does not have permission to list the reports, so perhaps future ones will not be on their site.
Great to see some solid discussion on this board. Seems like we have some good resources for information. I hope it's all true! ;o)
Thanks for sharing...I look forward to hearing more from everyone.
GLTA!
Geo, you should call me sometime. I have some good info to share with you.
Very good, and thanks for your recent posts on I-Hub.
Ok, so let me get this straight we have an oil and gas company that has a minority shareholder that holds less than 10% who thinks they have a right to control the board. In the meantime the group that has gotten us here so far is in negotiations to bring on a major shareholder and add one more to the board.
This should be fun to watch.
No matter what happens the share price is going to go up.
Fishin100 thanks for the advice earlier, I am getting set up to do so.
Very aware of Hotcopper, have not posted anything there but those guys sure do like to write up the bad stuff and ignore the good. One thing I really like about BCC is that they never give up. When natural gas went bad in 2009, they jumped over to oil, when Lee County didn't work they went after Alaska. When the stuff they bought from Steller didn't work they bought Kenai Loop. When they didn't have a drilling rig they bought one without any money of there own. When their funder pulled out of Alaska they replaced and did a bigger deal. With all the negativity in the market comes the time to snap up cheap shares.
At this point and 4 cent share has only a potential of dropping by 3 cents. And while that is a lot percentage wise it still means that with a very small amount of money you can get a ton of shares today. A raise in price by 1 cent gives you a 20% return. That's pretty good in my line of thinking.
Also, the proposed guys are running something called Dart Energy and they are working hard to push that share price down so they can take it private cheaply. They did that at ACER I believe. It the case of BCC they don't have to go through that, they can just do it at this price. I am not sure they understand the asset base though, they are unconventional oil and gas and probably have never been to Alaska.
One of the guys that I am familiar with is close to Buccaneer and tells me they are close to a cornerstone investor that would need board representation, could be good to see another Oil and Gas pro on the board.
Another bit of information that I have recently discovered:
-Buccaneer has set 20" surface casing...
-They have just nippled-up to the new BOP stack & installed a newly rebuilt 15K psi choke manifold...
-I think they are in the process of testing the BOPs & all the valves in the choke manifold which could take another 2-3 days, as their are a lot of valves in the manifold & they have to be pressure tested for 1 hour each.
-They will next drill to 2000 ft (MD/TDV) & run 13 3/8" casing...
-Then there are numerous horizons of pay grouped into two main formations between 2000 ft (MD/TVD) & 8000 ft (MD/TVD).
Another interesting bit of information is that Buccaneer has devised a way to get this well-bore drilled for free... Shareholders can thank the state of Alaska for their free wellbore after the prospect has been proven... There is even a significant possibility that Buccaneer might actually get paid for drilling the well...
Here is a post that discusses BCGYF, ever so briefly:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=8825883
Deep Down, that's what the 249b filing is all about; extensive write up on HotCopper... Have been to that site yet? It looks to me more like a situation where some "raiders" were invited to the party when money was tight and they would like control. I doubt these guys care about the companies ability to communicate changes in the drilling plan. They are more interested in the very low share price compared to the analysts take on the company. Did you see the latest valuation 9.5 cent target. The lower investor interest the better the deal is for them.
Have you read this article about Apache (another Cook Inlet hopeful) http://fuelfix.com/blog/2013/05/16/apache-investors-reject-executive-pay-raise-in-advisory-vote/
“Why is our stock where it is?” Steve Farris (APACHE CEO) said. “One is, we have a great company and have done a great job, but we have not done what we said we were going to do. The second is, our position in Egypt. We can talk about success but it is still an area of concern for our shareholders.”
Take out Steve Farris and insert Burton, of Course we don't work in Egypt but Alaska has a similar reputation.
OilPatch, you are aware that some of the shareholders are trying to oust the board, aren't you? After a very slow 2012 some new investors entered BCC and decided it was a take over target. There was a board resolution to up Curtis' and Dean's salary at the end of the year that either got defeated or was pulled before it could get defeated which really highlights a lack of understanding on where the company is and where it is going. It seems that after the funding got tight in early 2012 the company didn't update the market on how that would affect the drilling schedule. But anyone reading the releases should have been able to pick up on that.
DeepDown - Nice catch on the article. That was in the Houston Chronicle over the weekend. I wonder what its like running a company on two contenents and only seeing the rest of the board when you travel. Curtis has extensive oil and gas experience that's obvious. Dean seems to be the "money" guy having raised capital like a there's no tomorrow (in BCC's case there is no tomorrow if he doesn't succeed.) I like the ferensic engineer, Frank Culberson, his company seems focused on avoiding problems or diagnosing the cause after the fact. I wish he had called 'BS" on the reports coming from the rig. Then again, he probably did when it finally arrived in the Cook Inlet. The really interesting board pick is the Chairman. Allen Broome, he seems to be one of the "put him on the board" kind of guys. His experience reaches well beyond oil and gas. Seems he has been involved in Coal, Wind, Steel, and technology companies. He has been on some big ones and some small ones. I wonder how often he and Curtis but heads?
I'm pretty confident in the source. Interesting read, this article gives us a lot of back ground on Curtis Burton the CEO of Buccaneer. I find it interesting that he decided to launch an oil and gas company focused on the Gulf of Mexico only to find himself running a producer in the Cook Inlet of Alaska. Turning the ship that dramatically couldn't have been easy.
http://fuelfix.com/blog/2013/05/20/curtis-burton-takes-buccaneer-energy-into-alaskas-cook-inlet/#12451-2
Also looking at the staff pages it seems BCC is growing on the financial and operations side of the business.
I have been buying on Market the last few days, as I see it they may have had delays, still are having delays, but the platform continues to progress. Now the offshore well is drilling, soon the onshore well begin drilling and then it's a matter of capital where they go next.
Let's hope they just keep getting it done.
I hope your source is correct. TY for the post.
I understand that Dean is traveling from Dubai back to Australia and one of my sources said the Glacier rig was being prepped to move into position for KL 2. So that adds to Cosmo being drilled currently, a recent deal with Conoco and production up by over 100% since the beginning of the year. If Dean is heading home already does that mean he has found his prospect to pick up the short fall?
Since one offer has been tendered and rejected by the company and the shares are still trading at sub four cents, this is probably as low as it is going to go. Once the capital is squared this one should take off (assuming all goes well with the drill bit.)
Buccaneer Energy begins drilling Cosmo well
Posted Tuesday, May. 14, 20130 Comments PrintReprintsMore Sharing ServicesShare
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The Associated Press
KENAI, Alaska — Buccaneer Energy has started drilling its first Cosmopolitan Prospect well with the Endeavour-Spirit of Independence jack-up rig, which arrived nine months ago from Singapore.
The company began drilling near Anchor Point on Sunday, the Peninsula Clarion reported ( http://is.gd/B6fary). The area off the Kenai Peninsula is known for its shallow gas reserves and deeper oil prospects.
Buccaneer says it plans to drill the rig to a depth of 8,000 feet. Oil core samples will be taken to better understand the reservoir and shape a plan for future oil development. The company does not plan to flow test the oil formation, but it says gas zones that are identified will be tested.
"On completion of drilling and logging operations, the well will be plugged back to the bottom of the Tyonek gas formation," the company said in a prepared statement. "Gas zones within the Tyonek formation that are identified as potentially commercial through drilling and logging will then be perforated and flow tested.
"If successfully tested, the well will be temporary abandoned as a future gas producer," the statement said.
The rig was initially meant to stay in Homer for a few days when it arrived last August.
However, it wound up staying 218 days because of delays and repairs, causing its harbor fees to go to about $500,000. Buccaneer and its former operator, Archer Drilling, have since sued each other over delays.
Spartan Drilling has taken over as the new operator for the Endeavour.
Alaska Oil and Gas Conservation Commission crews will monitor the rig as it begins drilling, said commission chairwoman Cathy Foerster. That's a normal practice any new drilling rigs.
"We just want to make sure things are running the way they are supposed to run," she said. "A rig that has been out there and has proven itself to be drill-worthy is one thing, but something that has never operated, we just have to make sure it does."
Buccaneer Energy Ltd., based in Houston, is working with BlueCrest Energy Inc., a Fort Worth, Texas-based company, on the project.
Information from: (Kenai, Alaska) Peninsula Clarion, http://www.peninsulaclarion.com
Read more here: http://www.star-telegram.com/2013/05/14/4849566/buccaneer-energy-begins-drilling.html#storylink=cpy
futr
Well lets see, so far this year they have doubled production at Kenai Loop, they have Spud their first offshore well, doubled their monthly income from last year, done a deal with ConocoPhillips, and launched a new website. They do seem pretty busy this year.
This company just keeps trying...hard to see a downside here.
I agree... just need management to execute now.
This one really is a find, they have a new analyst report on their website that suggests that their Kenai Loop project more than justifies their current 4cents. Cosmo could add 3cents or more and the next offshore drill might add 6-9 cents. This one should just keep going up, unless Pioneer moved the oil when they weren't looking.
I hear that they are turning to the right as we speak... Just TD'ed the 17.5" surface hole & are about to pickup the 26" hole-opener... So yes, they have spud & are making-hole...
Geo, when are you going to get the bit turning?? Make it happen man!
Great to finally see some progress for BCC!
My source has suggested that Buccaneer's first well, the Cosmo#1 should prove-up about 500 BCF of natty-gas reserves. He also stressed that the seismic amplitude was very good on this reservoir/horizon (Regarding seismic, an operator can be pretty certain whether or not a given target is filled with gas or not, it is the oil-bearing targets that seismic data is far less certain on).
Another promising thought is that with all the coal seams that are present in Cook Inlet Sediment, if seismic indicates the presence of an anticline (underground hill), or any trap for that matter, there is a high probability that the sediments associated with that trap will be will be gas bearing...
I would expect delays through the duration of the Cosmo#1...
Would love to see Buccaneer hit on their first well. Investors will realize just how much potential this little company has. But first they have to raise big money, suffer more dilution AND avoid being taken over by the dissident investors.
I heard they are AOGCC Compliant/Certified, but facing some logistical challenges due to a limited number of Cook Inlet supply ships... Waiting to take on cement & barite, should spud Friday (tentative).
Better news is the certification of the rig. they can finally drill, baby, drill!
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