Buccaneer Energy Agrees to Buy Transocean Rig for $68.5 Million

Buccaneer Energy Ltd. (BCC), an oil and gas producer with operations in the Gulf of Mexico and Texas, agreed to make its largest purchase ever by buying a shallow- water rig from Transocean Ltd. (RIG) for $68.5 million in an effort to expand its business to offshore Alaska.

With rigs hard to come by in Alaska, buying its own vessel will help guarantee the company access in the state, where it has acreage in the offshore Cook Inlet and the onshore Kenai Loop development, Curtis Burton, chief executive officer for Buccaneer, said today in an interview.

“It’s important that you have a rig to drill with when you need one,” he said. “I like Alaska for a whole host of reasons. We’re there for the long haul.”

The rig, which can operate in water as deep as 300 feet, was built in 1982 and upgraded in 2004, he said. The total amount spent on the rig after additional upgrades and mobilization costs will be $86.5 million. It’s expected to arrive in the Cook Inlet by as late as May to start work, the company said in a statement issued to Bloomberg News.

Buccaneer’s production about two months ago was roughly 2 million cubic feet of natural gas per day in the Gulf of Mexico and about 200 barrels of oil per day in an onshore field in southeast Texas, Burton said.

Buccaneer, with offices in Sydney and Houston, will own a roughly 50 percent stake in the rig and plans to hire a drilling-rig contractor to operate it, Burton said. The remaining half will be owned by offshore rig owner Ezion Holdings Ltd. (EZI) of Singapore and a public-private entity known as the Alaska Industrial Development and Export Authority.

Guy Cantwell, a spokesman for Vernier, Switzerland-based Transocean, did not immediately respond to phone and e-mail messages seeking comment.

The sale of the rig, which has been parked in Malaysia without work since September 2009, is expected to close between Sept. 30 and Oct. 25, the company said.

Buccaneer plans to drill at least four wells with the rig and has the right of first refusal on it through the end of 2014.

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net. Edward Klump in Houston at eklump@bloomberg.net.

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net