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Buccaneer announces new loan after contractors complain

Craig MedredAlaska Dispatch

Petroleum News reports that independent oil and gas producer Buccaneer Energy is about to secure $20 million in financing that will allow it to pay back several unsatisfied Alaska contractors and purchase a new drilling rig.

Buccaneer has been in danger of running out of welcome because of missing payments to contractors that have worked on the company's Kenai Loop natural gas project, said representatives of several companies who testified at a Kenai City Council meeting on April 4.

“You could probably more than half fill this room with the people they owe money to,” said a representative of Inlet Drilling.

The outstanding debts, including a $5.1-million lien filed March 30 by Nana Construction, were enough to give the Kenai City Council pause about renewing Buccaneer's special use permit for a full year, as requested. Instead, the council extended it until May 4 to allow a review of the situation before a longer-term permit is issued.

The $20 million in new financing announced April 18, currently in the final stages of lender approval, would allow Buccaneer to settle up with the contractors and purchase the Glacier drilling rig that has already been used on its Kenai Loop project.

“The purchase of the Glacier rig is a significant milestone and key component of our onshore Alaska strategy, as it will allow us to immediately secure enabling assets in the Cook Inlet,” Gallegos said. “The purchase of the rig ensures timely drilling of our Kenai Loop project and also assists in the control of costs associated with the project.”

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