Buccaneer Lodges Multi-Million Dollar Counterclaim against Archer Drilling

HOUSTON--(BUSINESS WIRE)--Buccaneer Energy Limited (“Buccaneer” or “the Company”) provides the following update in respect to the suit filed by Archer Drilling, LLC (“Archer Drilling”) following the termination of Archer Drilling as the project manager of the modifications and repairs of the “Endeavour – Spirit of Independence” (“Endeavour”) jack- up rig.

The Endeavour is owned by Kenai Offshore Ventures, LLC (“Kenai Offshore”), which is a joint venture between Buccaneer, Singapore based Ezion Holdings Limited and the Alaska Industrial Development and Export Authority (“AIDEA”). Buccaneer is the designated Manager of Kenai Offshore.

Archer Drilling was engaged by Kenai Offshore in October 2011 under a Master Services Agreement (“MSA”) to provide project management services for the modifications and repairs required to be undertaken to the Endeavour to allow it to operate in the Cook Inlet, Alaska.

Today the Company filed a counterclaim in the District Court, Harris County Texas against Archer Drilling for conversion, fraud, and interference in contracts relating to the damages sustained by the Company and the Company’s wholly owned subsidiary Kenai Drilling, LLC (“Kenai Drilling”), among others.

The counterclaim outlines the damages caused by Archer Drilling’s misrepresentations, misconduct, and delays resulting millions of dollars of damage, including but not limited to the loss of up to US$30.0 million in revenue to Kenai Drilling because of the inability to use the Endeavour to undertake drilling operations within the Cook Inlet.

Kenai Offshore is in the process of preparing its own counterclaim against Archer Drilling for damages.

Yours faithfully

BUCCANEER ENERGY LIMITED

Mr Dean Gallegos

Director

For further information please contact Dean Gallegos, Executive Director on 0416 220 007 or 02 9233 2520. Alternatively visit the Company’s website at www.buccenergy.com.

About Buccaneer

Buccaneer Energy Limited is an Australian listed company focused on developing its 100% owned oil & gas assets in Alaska. The Company's flagship projects are a series of onshore and offshore developmental and exploration prospects in Alaska’s Cook Inlet.

Buccaneer Energy has a 3 pronged cash flow strategy:

• Developing the 100 % owned Kenai Loop onshore gas project with independently assessed 6.4 MMBOE in 2P Reserves;
• Operating an offshore jack-up rig for use by third parties in the Cook Inlet; and
• Developing its 100% owned offshore Cook Inlet projects that have independently assessed 88.4 MMBOE in 2P Reserves / P50 Resources using the acquired jack-up rig.

Buccaneer Energy has a 50/50 joint venture with Singaporean based Ezion, a leader in the development, ownership and chartering of strategic offshore assets, and the Alaskan Industrial Development and Export Authority (“AIDEA”). This joint venture has acquired the jack-up rig “Endeavour” which is capable of drilling in all areas of the Cook Inlet, the Beaufort Sea and the Chukchi Sea. Mobilisation of the Endeavour into the Cook Inlet was completed in late August 2012.

The Alaskan Government is supportive of oil and gas in the Cook Inlet. There are a number of fiscal incentive programs for exploration and development in the Cook Inlet.

Buccaneer Energy has drilled two producing onshore wells at Kenai Loop, in Kenai Alaska.. The field is currently expected to produce between 10.0 - 11.0 MMCFD once permanent production facilities are in place. Buccaneer plans up to three more wells to be drilled at this location during 2013

Buccaneer Energy also has major working interests in Texas, and the Gulf of Mexico, USA.