QUARTERLY REPORT by bnmbgtrtr52


									                                                     ASX RELEASE - 29 OCTOBER 2010

                                   THE QUARTERLY NEWSLETTER OF
                                       BUCCANEER ENERGY LIMITED

BuccanEER EnERgy LImITEd (“BuccanEER” oR “THE company”)
Is pLEasEd To pREsEnT ITs quaRTERLy REpoRT foR THE
3 monTHs To 30 sEpTEmBER 2010.
THE HIgHLIgHTs of THE quaRTER wERE as foLLows:

•   progressed netherland sewell third         •   successfully drilled and established oil
    party reserve report on north middle           production at the alexander # 1 well
    ground shoal and north west cook Inlet         located in Lee county
    – available in the next 30 - 45 days
                                               •   completing the leasing of a new
•   progressed unit applications for both          onshore cook Inlet project
    north middle ground shoal and north
    west cook Inlet

Buccaneer Energy’s wholly owned subsidiary Buccaneer Resources is based
in Houston, Texas and is an upstream oil and gas company. It specialises in the
development and expansion of behind-pipe proved and probable reserves and low-risk
exploration plays with growth potential. Buccaneer’s growth strategy is focused on the
progressive expansion of oil and gas production and reserves by acquiring significant
working interests in low-cost, low-risk development properties that possess significant
undeveloped upside.

pompano pRojEcT
Buccaneer – 65% working Interest
The following production volumes are net to Buccaneer’s 65% working interest only:

                               gas production           average sales price   gross Revenue –      Lease operating
  production month                                                                                                   net Revenue - us$
                               Volume - mcf                / mcf – us$              us$              costs – us$
         july 10                     79,771                     $4.658            $221,679             $146,353          $75,326

       august 10                    98,748                      $4.545            $266,613             $157,598          $109,015

    september 10                     95,016                     $3.631*          $200,472*             $151,830*         $48,642

*Estimate based on available data received at time of report.

well utilisation rates for the 3 months were close to 100%. The major components associated with Lease operating costs are
insurance charges for wind storm damage for assets held in the gulf of mexico. The higher amounts are effective for a
5 month period only. The last payment for 2010 will be made in november.

current production at the pompano field is a combined 4.6 million cubic feet per day (mmcfd) to the 100% working Interest with
the individual wells performing according to expectations..

LEE counTy pRojEcT
Buccaneer – 52.5% working Interest
The following production volumes are net to Buccaneer’s 52.5% working interest only:

          production Volumes to 30 september 2010                             oil production Volume - Bo

                                Vick # a2                                               1,646

                              alexander # 1                                            2,585

Buccaneer’s net royalty interest to its 52.50% working Interest is 38.375%.

The crude produced to date is a light sour crude with a ~34 degree apI. The oil has a high sulphur content of approximately
1.0% – 1.2%, a sulphur content of less than 0.2% is the limit for sweet. as such a discount of $10 - $15 a barrel is applied to
the sales price.
LEE counTy - onsHoRE TExas
52.5% working Interest
The Lee county project is located approximately 120 miles northwest of Houston, Texas.

LEasE posITIon
The company holds a 52.5% working interest in Lee county project located in central Texas, usa. The Lee county project holds
excellent potential for obtaining significant recoverable amounts of oil and gas, the main target reservoirs are the austin chalk,
Eagle ford shale, Buda, Edwards and sligo formations.

ausTIn cHaLk – REsERVoIR BackgRound
The reservoir drive mechanism in the austin chalk is solution gas drive. fractures within the austin chalk typically contain oil with
dissolved gas in solution. when a well is drilled through the fractured oil reservoir and then opened at the surface, initially the
buoyancy of oil over water (gravity) pushes the oil into the well towards the lower pressure at the surface.

as the oil rises, the pressure is reduced and the dissolved gas bubbles out of the oil and expands – similar to opening a bottle of
soda beverage. The expansion of the gas lifts the oil to the surface – again similar to opening a soda beverage where the bottle
was shaken and the gas and liquid forcefully overflows. In this situation, the well is flowing..

since the gas is released from the oil coming to the surface, the combined gas and oil flow is piped through a separator on the
surface where the oil comes off the bottom and flows to the tanks, and the gas comes off the top and goes to flare. The amount
of gas in the oil is referred to as the solution gas-oil ratio (“goR”), measured in cubic feet per bbl. If the goR is relatively low (about
100 cubic feet per bbl in this area) and the oil rate is low, there is too little gas to commercially sell, so it is used to fuel production
equipment and the excess is flared. By definition, a solution gas drive reservoir has no water drive pressure support, so the
pressure in the reservoir declines rapidly after initial production. The gas in solution with the oil rapidly depletes with the pressure
in the reservoir, so the oil stops flowing to the surface; which then requires an artificial lift system, like pumping.
                                                                                                                       LEE COUNTY LOCATION MAP

once the well is pumping oil, the production rate is dictated by two main factors:

•   the amount of oil feeding into the well from the intersected fractures in the surrounding chalk; and

•   the capacity of the pumping equipment.

The extent of fracturing that can be encountered within a vertical well is usually far less than that in a horizontal well, therefore the
quantity of oil to feed into the well is also less. Vertical wells can still contain commercial quantities of oil that can be extracted using
pumping and the installation of pumping equipment is a common method of operating these types of wells.

The pumping equipment currently at Lee county has a pumping capacity of 200 – 260 Bopd however this can be upgraded with
additional expense, if warranted.

VIck # 1 wELL pumpIng opERaTIons updaTE
Based on oil shows while drilling and log indications that multiple fracture zones had been intersected, the company elected to
complete the well and place it on production with pumping equipment, significant water production was anticipated. This approach
emulates other successful wells elsewhere in the trend that have displayed the above characteristics while being drilled and have
been placed on pump and eventually became successful oil producers, even when no oil shows have been seen during drilling ops.

The well pumped approximately 19,630 barrels of water which is within the 15,000 – 20,000 barrels of water range that the
company expected to be required to stimulate oil production. oil production did not commence and the pumping equipment has
been taken out of the well. The company intends to re-enter the well and explore other opportunities for production.

These include but are not limited to:

•   further horizontal drilling and completion in prospective zones within the austin chalk;

•   fracturing of the austin chalk formation over intervals with oil/gas shows;

•   horizontal drilling in the 140’ Eagle ford shale formation – see below; or

•   deepening of the well into lower zones with prospective pay in the Buda, Edwards or sligo formations.
                                                                                                                         puRposE onLy.
                                                                                                                         noT IndIcaTIVE of

VIck # 1 - BackgRound
The Vick # 1 well was drilled to a total depth of 6230 feet plus and additional
700 foot horizontal segment and wireline logs were successfully run.
consistent with pre-drill expectations, multiple zones exhibited oil shows.

Those zones are:
Lower Austin Chalk - 118 feet There is abundant material indicating natural fractures and the rocks exhibits a strong, light
                                       blue hydrocarbon cut interpreted to be light oil. The wireline logs indicate porosities in the
                                       8 – 12% range, which is considered good for the austin chalk and is above pre drill expectations.

Eagle Ford Shale – 140 Feet            The Eagle ford is not a ‘known’ producer in this trend, but is productive of oil and gas in Texas.
                                       This zone indicated shows of hydrocarbons while drilling.

                                       The Eagle ford rocks exhibits a light blue hydrocarbon cut interpreted as light oil and there
                                       was a gas increase whilst drilling.

VIck # 2 wELL
a 1700’ horizontal well was drilled in the Lower austin chalk fractures that
previously flow tested at 511 Bopd over a 24 hour period in the vertical well.
The horizontal well intersected numerous fractures zones and approximately
500’ of oil pay being intersected. oil accumulated on the mud pits while drilling
at four different locations within this pay. The well successfully commenced
flowing oil at increasing rates upon testing but flow ceased after a build up of
drill water and formation water choking off the oil and solution gas.
as the drilling rig is on site and the un-availability of a coiled tubing unit to assist in the removal of water build-up so as to re-establish
oil production in the horizontal well, a decision was made to drill an additional 500’ of horizontal. drilling ceased after crossing a fault
and encountering the Eagle ford shale. a decision was then made to side-track a new horizontal into an adjoining fault block.

at the time of this report the new horizontal has commenced and will be 1750’ in a direction 180 degrees to the existing horizontal in
the Vick # a2. The new horizontal will test a fault block closer to the alexander # 1 well and that was going to be tested in a future
well (allar # 1). This allows for the testing of this fault block at a significantly lower cost than a new well.

a decision on completion will be made after results from the new horizontal into the allar # 1 fault block.
nIckLos #1 RIg on
VIck #2 LocaTIon

               aLExandER # 1 wELL
               This well was spud in late august 2010 with the intention of testing both the
               austin chalk and Eagle ford shale formations with a total depth (Td) of 6,250’.
               fracturing was unexpectedly intersected over a 20’ thick interval (5,640’ – 5,660’) in the middle of the austin chalk and both oil
               and gas started to flow from the well. a 72 hour production test was undertaken and the well has produced 2,846 barrels of oil
               for an average flow rate of 948 Bopd. The oil is 31 degree apI, a light crude oil, no formation water was produced. gas was flared
               at the site.

               on completion of the production test it was decided to kick off the planned horizontal at a Td of 5,727’. In the process of building
               the angle for the horizontal, the lower sections of the austin chalk (approximately 300’) will be tested. It was decided not to
               deepen the vertical well to the Eagle ford shale.

               while building the angle for the horizontal mud logs indicated a further two fracture zones were intersected and the well again
               commenced flowing oil, gas is being flared at the surface. maximum gas readings of over 5000 units were recorded.

               a second production test over was conducted over a 72 hour period. The well unloaded drilling fluid (pumped into the well bore
               during drilling operations) and produced oil and gas.

               over the final 12 hours of the flow test the well was flowing at a daily rate of 534 Bopd with the water rate declining and the oil
               rate increasing. stating an average production rate over the full period would be misleading due to the process of unloading drilling
               fluid and its influence on oil production rates. as the 3 different facture zones could not be isolated, the zone from which oil was
               produced cannot be accurately determined.

               due to the number of fractures intersected and the initial production rates from those fractures a decision was made to complete
               the well for production as a vertical well. The alexander #1 was placed on production via pumping on friday 22 october 2010.
               since that time production has averaged 206 Bopd up until wednesday 26 october 2010, consistent with the installed equipment
               pumping capacity.

               a decision will be made on drilling a horizontal well to encounter additional fractures in either the middle austin chalk (941 Bopd
               flow rate over 72 hours) or Lower austin chalk after assessing oil production from pumping operations in the vertical well bore.
during the quarter the company has been actively progressing its existing
cook Inlet basin projects and reviewing new leasing opportunities. The
development of the company’s alaskan properties remains its top priority.

The company has appointed netherland sewell, one of the leading us based engineering firms, to complete a third party
engineering report on the reserves for both north west cook Inlet and southern cross (north middle ground shoal).

The process is progressing smoothly and the company expects to be able to make the report public in the next 30 – 45 days.

unIT appLIcaTIons
a unit application for both north west cook Inlet and north middle ground shoal (nmgs) has been lodged with the alaskan
dnR, under this application the nmgs project will be renamed the southern cross unit. The unit is expected to be granted by
november 30, 2010.

The main advantage of combining the lease positions into one unit is that a single discovery well (or wells)and a plan of
operations will allow for the efficient development of the unit area without regards to individual lease expirations.

pRojEcT acquIsITIon
The company is in the process of leasing a new onshore project from private interests, this is expected to take place in
the current quarter. It is anticipated that this project will be the first project in the company’s alaskan portfolio to be drilled.
further disclosures will be made, including anticipated drilling timeline, when leasing has been completed.
                                                                                                                              oIL pRoducTIon In THE cook InLET, aLaska

noRTH mIddLE gRound sHoaL (nmgs)
The nmgs field is in approximately 30’ of water with no unusual technical hurdles to drill and
develop reserves. The nmgs field is within 5-10 miles of four significant oil and gas fields as follows
(see figure 1):
•   Trading Bay field with production to date of 103 million Bo, 73 Bcf of gas and 360 thousand barrels of natural gas Liquids (“ngL”);

•   mcarthur River field with production to date of 630 million Bo, 261 Bcf of gas and 9 million barrels of ngL;

•   middle ground shoal field with production to date of 198 million Bo and 93 Bcf of gas; and

•   south granite point field with production to date of 147 million Bo and 131 Bcf of gas.
                                                                                                                                                                                                                       MOQUAWKIE UNIT
                                                                                   NORTH MIDDLE GROUND SHOAL                                                                                                              AURORA GAS
                                                                                             Cook Inlet, has
since acquiring the initial leases from stellar oil & gas, LLc (“stellar”) in march 2010 the companyAlaskaexpanded its lease positionMoquawkie Field
                                                                                                             NICOLAI CREEK UNIT      Gas: 4,363,310 MCF
from a net 1,280 acres to a net 7,602, of a gross 10,108 acres, through acquisition and control of the nmgs structure. Field
                                                                                                                                        Buccaneer Alaska Leases
                                                                                              Buccaneer Alaska Leases
                                                                                                                     AURORA GAS         May 2010 Acquisitions

                                                                                     Oil & Gas Unit Boundary
                                                                                                                  Nicolai Creek
                                                                                                                             Selected Exploratory Wells

                                                                                     Industrial Facilities
                                                                                                                                                                              Gas: 5,074,764 MCF                   Albert Kaloa Field             1
                                                                                                                             Gas Well
                                                                                                                                                                                                                   Gas: 3,267,633 MCF
This net lease holding represents a 100% working interest in 5 blocks.
                                                                                     Gas Pipeline
                                                                                     Oil Pipeline
                                                                                     Gas Field                               Oil & Gas Platform

                                                                                        north middle ground shoal, cook Inlet - alaska                                                                                 figure 1.
                                                                                     Oil Field
                                                                                                                        Cumulative Oil and/or
                                                                                     Oil & Gas Field
                                                                                                                        Gas Production to Feb 2010
                                                                                     Gas Storage Field

Importantly, the company now controls the lease on which the pan am                                                                                                                                                     BRUCE
                                                                                                                                             S GRANITE POINT UNIT
a-1 well (mgs state 18743-1) was drilled in 1964 and which flow tested                                                                                 UNION OIL
                                                                                                                                                                        Granite Point Field                        ANNA

gas (> 3 mmcf/day) in the Lower Tyonek formation from one of three                  N TRADING BAY UNIT                                                                  Oil: 146,662,043 BBL
                                                                                                                                                                        Gas:130,840,187 MCF
                                                                                            UNION OIL
gas intervals identified on drilling logs; this well also had significant oil        Trading Bay Field
                                                                                     Oil: 102,873,692 BBL
                                                                                                                                                                     Atlantic Richfield
                                                                                                                                                                     Trading Bay St. 2                   GRANITE POINT

shows in the Hemlock formation at the bottom of the well. neither the                Gas: 73,113,815 MCF
                                                                                     NGL: 613,832,552 BBL                                            SPARK                                Pan American
                                                                                                                                                             Pan American                 N MGS ST 18745 1
gas nor oil was produced due to very low oil and gas prices at that time.                                                                                    N MGS ST 18745 1-A
                                                                                                                                                                                    Pan American
                                                                                                                                                                                    N MGS ST 18745 2
                                                                                                                                                                                              Placid Oil
                                                                                                                                                                                              State 17580 1

dRILL pERmITTIng                                                                                                                 MONOPOD Pan American
                                                                                                                                         MGS ST 18743 1                               North
                                                                                                                                                                                      Middle Ground Shoal
The permitting process to drill in the cook Inlet takes approximately                                                                                            Pan American
                                                                                                                                                                 E MGS ST 18751 1     Field KITCHEN LIGHTS UNIT
                                                                                                                        KING SALMON
6-9 months. The company has commenced this process for nmgs                                                                                                                                           ESCOPETA

and has a detailed work schedule so that all permits are in place for the
commencement of the 2011 drilling season commencing in june/july 2011.                                            STEELHEAD

                                                                                                                                                                       Middle Ground Shoal Field                           T
The company already has in place the air permit that regulates drilling rig                                    DOLLY VARDEN
                                                                                                                                                                       Oil: 197,589,339 BBL
                                                                                                                                                                       Gas: 93,528,147 MCF
emissions, this is a long lead time permit and does not expire.                       TRADING BAY UNIT
                                                                                              UNION OIL
                                                                                                       McArthur River Field                                  C
                                                                                                       Oil: 629,960,444 BBL
                                                                                                       Gas: 261,432,770 MCF                                                               O                            KENAI PENINSUL
                                                                                                       NGL: 8,978,879 BBL
                                                                                   REDOUBT UNIT                                                           S MIDDLE GROUND SHOAL UNIT
                                                                                   COOK INLET ENERGY                                                      UNION OIL
                                                                                                                 Redoubt Shoal Field
                                                                                                                 Oil: 2,354,700 BBL
                                                                                                                                                                     Port Nikiski                                                  MAPMAKERS

                                                                                                                 Gas: 578,920 MCF                                                                                                  4 Miles

                                                                                                                            R13W                                             R12W                                               R11W
                                                                                                                                                UNION OIL

                                                                                                                                        Pretty Creek Field
                                                                                                                                        Gas: 10,410,192 MCF

                                                                                                                                                                                             Ivan River Field
                                                                                                                                                                                             Gas: 80,632,804 MCF
                                                                                                BELUGA RIVER UNIT
                                                                                                                                                                                             IVAN RIVER UNIT

                                                                                                                                                                                             UNION OIL

                                                                                                          Beluga River Field

                                                                                                          Gas: 1,154,457,872 MCF                     BELUGA RIVER GENERATION PLANT

                                          Three Mile Creek Field
                                          Gas: 1,923,383 MCF

                                                                                             ro u ra
                                                                                C K (6") - A
                                                                           LONE CREEK UNIT
                                                                               AURORA GAS
                                                                                                       Lone Creek Field
                                                                            3 MIL

                                                                                                       Gas: 7,777,767 MCF

                                                                       LONE CK (6") - Aroura

                                                                   MOQUAWKIE UNIT
                                                                                                                                                                                    B  SHELL OIL CO
                                                                                                                                                                                       N COOK INLET ST 1                                                                  N
                                                                                                                                                                             PHILLIPS PETROLEUM CO
                                                                                                                                                                                                     N COOK INLET UNIT
                                                                      AURORA GAS
                                                                                                                                                                             SUNFISH 3

                                                                              r                                                                CONOCOPHILLIPS ALASKA INC
                                                                          st a                                                                 N COOK INLET UNIT B-02
                                                                   Moquawkie Field ") -                                            PAN AMERICAN
                                                                   Gas: 4,363,310 (MCF 0                                           COOK INLET ST 17591 1                                                             North Cook Inlet Field
                                                                                     2                             "
                                                                                                                                                                      B          figure 1.
                                                                                  AR                               Tyonek                           B B                                                              Gas: 1,824,542,143 MCF
 I CREEK UNIT                                                                  ST                                                                       B
                                                                                                                                     PHILLIPS PETROLEUM CO
                                                                                                                                     COOK INLET ST 18740 1
                                                                                                                                                                     ARCO ALASKA INC PHILLIPS PETROLEUM CO
                                                                                                                                                                     SUNFISH 1
                                                                                                                                                                              B      COOK INLET ST 18741 2
                                                                            EN                                                                        PHILLIPS PETROLEUM CO
                                                                                                                                                                             B B
k Field
                                                                                                                                                      N COOK INLET UNIT B-01
                                                                                                                TYONEK NATIVE CORPORATION                                               PAN AMERICAN
 64 MCF                                                                                                                                        ARCO ALASKA INC B                        COOK INLET ST 18741 1

eld                                                                                                                                            NORTH FORELAND ST 1

3 MCF                                                 north cook Inlet prospect - alaska                                K                                                                                                                                     figure 2.   11
        PRODUCTION                                                                                                 O                                                                                                                                                      N
        FACILITY     Unio

                            ") -


            B RU C
                     E (6


                                                                         KITCHEN LIGHTS
                                                 noRTH wEsT cook InLET (nwcI)
                                           6. 6

                                               25") - U



                                                 The nwcI project is in approximately ESCOPETA with no unusual technical hurdles to drill and

                                                                             Granite Point Field       100’ water depth

                                                                             Oil: 146,662,043 BBL

                                                 develop reserves.           Gas:130,840,187 MCF

                                                        S GRANITE POINT UNIT

                                                 since acquiring the initial leases from stellar oil & gas, LLc (“stellar”) in march 2010 the company has expanded its lease position
                                                        UNION OIL

                                                 from a net 6,648 acres to a net 8,568 , of a gross 8,728 acres, through acquisition and leasing activities at alaskan state Lease

                                                                                                                                                                                                                                                            P hil

                                                 This net lease holding represents a 87.5 – 100% working interest in 6 blocks, the remaining 12.5% working interest (160 net acres)
                                                 in one of the blocks that the company does not own are held by Rutter and wilbanks corporation.                  KENAI PENINSULA

                                                                                                                                                                                                                                              i ll i
     North                                                                                             T9W                                  T8W
                                                                                                                                                                                                                                     oc o

                                                 nwcI HIgHLIgHTs
                                                         ALASKA                                                                                                       5

     Middle Ground Shoal


    B            • The lease adjoins conocophillips north cook Inlet field that is in production and has produced 1.8 trillion cubic feet (Tcf) of gas –
                                                                                                                                                                                                                         (1 6

                   see figure 2.

                                                                                                                                                                                                                                        BIRCH HILL UNIT


                                                                                                                                                                        UNION OIL
                                                             The company’s lease offsets an earlier well drilled in the western portion of the north cook Inlet field (conocophillips) that
                                                                                                                                                      so r
                                                                                                                                                                                                                                        Birch Hill Field


                                                             produced 85 Bcf of gas (phillips # a-13), this well is less than 1 mile fromAthe
                                                                                                                                           (1 0  )-
                                                                                                                                                "lease boundary.

                                                                                                                                                                                                                                        Gas: 65,331 MCF
R                                                •
                     The majority of production from the north cook Inlet field has comeI from the sterling sands which are above 6,000’ in depth.
                     The slightly deeper Beluga and upper Tyonek formations will also be gas bearing and should be mostly or totally un-drained in
e Ground Shoal Field
97,589,339 BBL       the north-western portion of the structure which makes up the northwest cook Inlet prospect.
93,528,147 MCF
                                                 •           The prospect also presents a deeper oil opportunity. field discovery wells tested oil in the Lower Tyonek and Hemlock
                                                             formations that have never been produced in the field and that would require a deeper, 14,000 foot exploratory test.
                                                                                                                                                                                                                                  SWANSON RIVER UNIT
                                                 •                                                                                                                    UNION OIL
                                                             five wells drilled by phillips, shell, and arco found the deeper oil sands. The shell well is the most northerly of these tests,                                     Swanson River Field
                                                             and it found and tested oil from these sands, and is approximately 1 mile from the prospect.                                                                         Oil: 229,785,658 BBL
                                                                                                                                                                                                                                  Gas: 2,860,782,724 MC
                                                 ONSHORE                                                                                                                                                                          NGL: 1,398,720 BBL
wEsT EagLE pRospEcT
no further field work on the west Eagle project was undertaken during the
quarter, the project is described below. stellar and its predecessor companies
have held some of these leases since 2006 and have a working Interest of
100%. The assessed p10 reserves are 330 Bcf of gas and 47 million barrels
of oil (mmBo). The p50 reserves are 100 Bcf and 10 mmBo.

The prospect includes 9 state Leases totalling more than 49,120 acres and is on the eastern limb of the cook Inlet Basin. The
prospect is designed to test potential oil on trend or slightly down-dip to, possible, logged oil pay in wells drilled in the 1960’s. In such
a position, the sands should be thicker and better developed and on the migration pathway of any oil moving into the structure.

gas is also expected in the shallower section. 2d seismic data has been shot in the area and needs to be licensed and interpreted.
a 10,000’ test will be required to test the Tyonek (5,000’; gas potential) through the Hemlock (9,800’; oil potential).           Ninilchik (Susan Dionne)

                                                                                                                                   Ninilchik (Paxton)

                                                                                                                                                                 MARATHON OIL COMPANY
                                                                                                                                                                                                WEST EAGLE
    The exploration potential is significant.
                                                                                                                                                                                                        Cook Inlet, Alaska
                                                                                                                                                             UNION OIL COMPANY OF CALIFORNIA

                                                                                                                                                                                                                   Buccaneer Alaska                             Buccaneer Alaska Acquisition At

    approximately 8 miles east of union oil’s (chevron) nikolaevsk/north
                                                                                                                                                                                                                   Previous Acquisitions                        Cook Inlet Areawide 2010 Sale
                                                                                                                            Ninilchik "

                                                                                                                                                                                           Field Name                         Oil & Gas Platform                     Oil & Gas Unit Boundary

    fork gas unit and 10 miles southeast of the deep creek gas unit.
                                                                                                                                                                                           Cumulative Oil and/or
                                                                                                                                                                                           Gas Production to Feb 2010
                                                                                                                                                                                                                         B    Selected Exploratory Wells
                                                                                                                                                                                                                                                                  Well Pads & Industrial Facilities

                                                                                                                                                                                                   Gas Pipeline
                                                                                                                                                                                                                                       Gas Field           Oil & Gas Field

                                                                                                                                                                                                   Oil Pipeline

    The exploratory p10 gas reserves are approximately 330 Bcf                                                                     west Eagle prospect - alaska                                    Proposed Gas Pipeline               Oil Field
                                                                                                                                                                                                                                                              figure 3
                                                                                                                                                                                                                                                           Gas Storage Field


    within the Tyonek formation. The p50 reserves are 100 Bcf.                                                                                                                                                                                                                                    T

                                                                                                                                                                                     Deep Creek Field                                                                                             2
                                                                                                                                                                                     Gas: 14,430,588 MCF
    The exploratory p10 oil reserves are approximately 47 mmBo                                                                                                                                                                                                                                    S
                                                                                                                                                                            DEEP CREEK UNIT
    within the Tyonek formation. The p50 reserves are 10 mmBo.                                                                                                                    UNION OIL

                                                                                                     COSMOPOLITAN UNIT
                                                                                                     PIONEER NATURAL                                                                                                                                                                              S
                                                                                                                       NIKOLAEVSK UNIT
                                                                                                                             UNION OIL
                                                                                                                                       "Red" Well 1&2
                                                                             NORTH FORK UNIT                                                                                                                                                                                                      4
                                                                        ARMSTRONG COOK INLET
                                                                                                                       North Fork Field
                                                                                                           rou te)

                                                                                             e (ap
                                                                                                  pro x.
                                                                                                                       Current Development
                                                                             Pro p.
                                                                                              Anchor Point

                                                                                                                                      KENAI PENINSULA




                                                                                                                                                                                                                                ak                                                                T
                                                                                                                                                                Homer                                                         em
                                                                                                                                                                                                                        Ka                                                                        S

                                                                        R15W                                                       R14W                                R13W                                     R12W                                          R11W
wEsT nIcoLaI pRospEcT
Buccaneer alaska recently acquired an onshore lease on the west side of
                                                                LONE CREEK UNIT
cook Inlet, and has a working Interest of 100%. The assessed p10 reserves
are 25 Bcf of gas. The p50 reserves are 14 Bcf.
                                                                   AURORA GAS                                         Lone Creek
The prospect includes one state Lease with 5,653 acres and is on the western edge of the cook Inlet Basin. The 2d seismic data Field
                                                                                                                      Gas: 7,777,767 MCF
used to map the lead has stacked amplitude anomalies in the same productive intervals at depths of 1000 to 3000 feet as the
nicolai creek field about two miles to the east.                                                                               Lone Creek
                                                                                                                                 MOQUAWKIE UNIT
                                                                                                                                          Moquawkie Field
•   Low-cost, high impact onshore gas project                                      west nicolai prospect - alaska AURORA GAS      figure 4.
                                                                                                                       Gas: 4,363,310 MCF
                                                                                                             T13W                              T12W                                                                      T11W

    analogous to the >10 Bcf nicolai creek gas field with multiple                         4
                                                                                          Miles                                NICOLAI CREEK UNIT
                                                                                                                               AURORA GAS
    stacked pay                                                                                                                               Nicolai Creek Field
                                                                                                                                              Gas: 5,074,764 MCF                                   Albert Kaloa Field
                                                                                                                                                                                                   Gas: 3,267,633 MCF
•   Low development cost – nearly us$5.0 million per well for
    drilling and completion. gas pipeline connection and processing                                                            west nicolai prospect
                                                                                                                                 S GRANITE POINT UNIT                                                     BRUCE
    facilities less than 2 miles at nicolai creek gas field                                                                      UNION OIL
                                                                                                                                  Granite Point Field
•   Roads and infrastructure close-by                                          N TRADING BAY UNIT
                                                                               UNION OIL
                                                                                                                                  Oil: 146,662,043 BBL
                                                                                                                                  Gas:130,840,187 MCF

                                                                                   Trading Bay Field                             BTrading Richfield2
                                                                                                                                  Atlantic                                                  GRANITE POINT
                                                                                                                                           Bay St.

    other leads on trend to the north.                                             Oil: 102,873,692 BBL
                                                                                   Gas: 73,113,815 MCF
                                                                                   NGL: 613,832,552 BBL                  SPARK
                                                                                                                              Pan American       Pan American

    oil lead to the southeast

                                                                                                                              N MGS ST 18745 1-A N MGS ST 18745 1

                                                                                                                         Pan American
                                                                                                                         N MGS ST 18745 2   B

                                                                                          MONOPOD                                                      BState 17580 1
                                                                                                                                                        Placid Oil

                                                                                                                                                Middle Ground Shoal
                                                                                                                                 Pan American B
                                                                                                                                 E MGS ST 18751 1

                                                                                                             KING SALMON                                                  KITCHEN LIGHTS UNIT

                                                                                                                                     Middle Ground Shoal Field
                                                                                                                                     Oil: 197,589,339 BBL
                                         W MCARTHUR RIVER UNIT                                    DOLLY VARDEN                       Gas: 93,528,147 MCF
                                              W McArthur River
                                            COOK INLET ENERGY Field                  TRADING BAY UNIT                          A
                                              Oil: 12,219,805 BBL                    UNION OIL
                                              Gas: 3,002,332 MCF
                                                                                        McArthur River Field                 C
                                                West Foreland Field                     Oil: 629,960,444 BBL
                                                                                                                                                                                                     KENAI PENINSULA

                                                Gas: 10,704,406 MCF                     Gas: 261,432,770 MCF
                                                                                        NGL: 8,978,879 BBL                                                    NORTH MIDDLE GROUND SHO
                                                  Kustatan Field                                                                                                      Cook Inlet, Alaska
                                                  Gas: 336,526 MCF                                               K           DILLON
                                                                                                                                                                                 Buccaneer Alaska                             Buccaneer Alaska Ac

                                                         Kustatan     "
                                                                                                                                                                                 Previous Acquisitions                        Cook Inlet Areawide 2

                                                                                                           O S MIDDLE GROUND SHOAL UNIT                  Field Name                         Oil & Gas Platform                     Oil & Gas Unit

                                                                                                                                                         Cumulative Oil and/or

                                                                                                             UNION OIL                                                                 B    Selected Exploratory Wells

                                                                                                                            Port Nikiski
                                                                                                                                                         Gas Production to Feb 2010
                                                                                                                                                                                                                                Well Pads & Indu

                                                                          OSPREY                                                                                 Gas Pipeline
                                                                                                                                                                 Oil Pipeline                        Gas Field           Oil & Gas Field

                                                                                                                                                                 Proposed Gas Pipeline               Oil Field           Gas Storage Field

                                                   REDOUBT UNIT                                                                                          "
aLaskan cLEaR & EquITaBLE sHaRE (acEs)
In 2007 the alaskan government introduced the acEs program to incentivise
new entrants to explore within alaska. This program takes the form of a
rebate of between 45 - 65% of direct exploration costs and up to 55% on
development costs. This is a significant incentive and substantially reduces
the commercial discovery threshold.

on the 19 april 2010 the alaskan Legislature approved a significant amendment to alaska’s acEs program. The governor signed
this legislation into law on may 10, 2010.

most significantly, the statutory amendments enacted with this legislation will establish a tax credit of up to us$25 million for
new wells drilled into the pre‐Tertiary strata of the cook Inlet with a jack‐up drilling rig.

The new incentive provides for the following:

•    If Buccaneer drills the first well in the cook Inlet using a jack‐up rig, it will be eligible to claim up to us$25 million of all drilling
     costs (including rig mobilisation costs). If it drills the second well, the claim will be us$22.5 million, and if its drills the third
     well, it is entitled to claim us$20 million. a company is eligible for only one of these incentives and is required to repay
     one-half (50%) the incentive equally over 10 years but only if hydrocarbons are successfully produced.

•    on any subsequent well in the cook Inlet, Buccaneer will still be eligible for a rebate of 65% of all drilling costs and 45% of
     all other development costs.

•    Buccaneer has a substantive acreage position in the cook Inlet and is positioned to move forward with exploration
     drilling plans later this year.

The above incentives apply irrespective of the success of any well or development program.

spRIngTREE spEcIaL oppoRTunITIEs fund
during the quarter the company continued to draw down on its convertible loan facility with new york based investment fund
springTree special opportunities fund, Lp (the “fund”). The facility expires in march 2011 unless cancel prior to this date.

amounts of $500,000 - $800,000 are drawn each calendar month. The company and its management are cognisant of the
dilutionary effect of this facility. The Board reviews the facility in relation to its capital requirements on a month to month basis.

pRoducTIon HEdgIng
during the quarter the company implemented a production hedging facility over its production from the 65% owned pompano
project located in the gulf of mexico.

The production hedging is in the form of an energy swap that commenced on the 1 april 2010 and terminating on 30
september 2011 at a price of us$4.36 / mmbtu. This compared to a price of us$3.87 / mmbtu at the time the hedge was
implemented. all prices refer to the Houston shipping channel Index.

over the next 3 months the following volumes are subject to the swap arrangements:

    month                      Volume - mmbtu

    october 2010               31,136

    november 2010              29,204

    december 2010              27,392

prices stated above are based on a thousand British Thermal units (“mBTu”) basis, which is approximately equal to a thousand
cubic foot (“mcf”). This is a financial contract that requires no physical delivery of gas.
at the date of this report the company had $2.1 million in available cash reserves.

at the date of this report the company had a fully drawn $1.0 million loan facility with macquarie bank Limited. This repayment of
this facility was rolled over 12 months until 30 september 2011.

The us$1.495 million Letter of credit (“Loc”) with macquarie Bank Limited to satisfy its bonding obligations for the pompano
production facilities was drawn during the quarter. at the end of the quarter us$280,000 had been repaid in accordance with
the terms of the facility.

yours faithfully

BuccanEER EnERgy LImITEd

mr dean gallegos


           This report contains some references to forward looking assumptions, estimates and outcomes. These are uncertain by nature and no assurance can be given by
           Buccaneer Energy that its expectations, estimates and forecast outcomes will be achieved.

           Information pertaining to Lee county project contained in this report were compiled by gary Rinehart, Bs in geology from university of oklahoma and who has had
           more than 35 years experience in petroleum geology. mr Rinehart has consented to the inclusion in this report of the technical matters and information herein in the
           form and context in which it appears.

           Information contained in this report pertaining to the alaskan projects was reviewed by dr. Vijay Bangia, phd in petroleum Engineering from the university of Tulsa,
           who has over 30 years experience including employment by shell oil company, union Texas petroleum, Burlington Resources and Renaissance alaska. dr. Bangia
           has approved the inclusion in this report of the technical matters and information herein in the form and context in which it appears.
alaska’s offshore waters and onshore prospects hold the potential to fuel the
state’s economy for decades and to play a key role in ensuring america has
the energy it needs until alternative sources become available on a large scale

•   alaska’s oil and gas industry has produced more than 16 billion barrels of oil and 6 trillion cubic feet of natural gas,
    accounting for an average of 20 percent of the entire nation’s domestic production (1980 - 2000). currently, alaska accounts
    for approximately 13.4% of u.s. production.

•   The oil industry continues to be the largest source of unrestricted revenue to the state, accounting for 93 percent, or
    $11.2 billion, of all unrestricted state revenue in fiscal year 2008. unrestricted general fund revenues from the oil and gas
    industry in fiscal year 2009 is expected to reach $5.5 billion, 87 percent of the anticipated unrestricted revenue.

•   The oil and gas industry accounts for more than 41,744 jobs, which is 9.4 percent of all employment in the state and
    11.2 percent of all wages at $2.4 billion.

•   a new analysis by the university of alaska anchorage showed the oil industry supports as many as 110,000 jobs in
    alaska (one-third of the state’s workforce), including funding for three-quarters of state government jobs.

•   The alaska permanent fund, worth $30 billion in spring 2009, was created in 1976 to set aside a portion of oil revenues
    for future generations. The fund has paid out more than $13 billion in dividends to alaskans.

•   The oil and gas industry has invested over $50 billion in north slope and cook Inlet infrastructure since the 1950s.

•   alaska ranks second behind Texas in daily oil production.

•   There are seven producing oil and gas fields on the kenai peninsula and offshore cook Inlet. This area has produced a
    cumulative total of over 1.3 billion barrels of oil and 7.3 trillion cubic feet of natural gas.

•   alaska has four refineries that produce gasoline, diesel and jet fuel for alaska markets. Refineries are located in nikiski,
    Valdez and near fairbanks.

•   a gas liquefaction plant at nikiski, the only one of its type in north america, supplies liquefied natural gas (Lng) to japan
    each month.

•   Lng exports to japan accounted for about a third of total cook Inlet gas production. Total industrial use of cook Inlet gas,
    including Lng exports, fertilizer manufacture and oil field operations, has remained constant at about 75 percent of total
    consumption since 1990. In recent years, cook Inlet natural gas production has been steadily declining with current
    production at approximately 190 Bcf per year.
mInIng ExpLoRaTIon EnTITy quaRTERLy REpoRT
Buccaneer Energy Limited          aBn: 63 125 670 733
quarter ended (“current quarter”) 30 september 2010

Consolidated statement of cash flows
                                                                    current quarter   year to date (3 months)
                                                                            $a’000                    $a’000
      cash flows related to operating activities
1.1   Receipts from product sales and related debtors                         $414                      $414
      adjustments from june quarter production payments                       -$79                      -$79

1.2   payments for                   (a) Exploration & Evaluation            -$773                     -$773
                                     (b) development                        -$1,135                  -$1,084
                                     (c) production                            -$0                       -$0
                                     (d) administration                    -$1,656                   -$1,656

1.3   dividends Received
1.4   Interest and other items of similar nature received                      $26                      $26
1.5   Interest and other costs of finance paid                                  $0                        $0
1.6   Income taxes paid
1.7   other                          (a) Hedge payments                          $1                        $1
                                     (b) gsT Refunds                           $35                      $35

      net operating cash flows                                              -$3,167                  -$3,167

      cash flows relating to investing activities
1.8   payments for purchases of:
                                     (a) prospects                             -$17                      -$17
                                     (b) equity investments                  -$265                    -$265
                                     (c) other fixed assets                     $0                        $0

1.9   proceeds from sale of:
                                     (a) prospects                              $0                        $0
                                     (b) equity investments                     $0                        $0
                                     (c) other fixed assets                    $14                       $15

1.10 Loans to other entities                                                    $0                        $0
     Loans repaid by other
1.11                                                                            $0                        $0
1.12 other (provide details if material)                                        $0                        $0
      net Investing cash flows                                              -$268                     -$268
1.13 Total operating and investing cashflows (carried forward)             -$3,435                  -$3,435

+ see chapter 19 for defined terms
mInIng ExpLoRaTIon EnTITy quaRTERLy REpoRT
Buccaneer Energy Limited          aBn: 63 125 670 733
quarter ended (“current quarter”) 30 september 2010

Consolidated statement of cash flows
                                                                                  current quarter         year to date (3 months)
                                                                                          $a’000                          $a’000
1.13   Total operating and investing cashflows (carried forward)                          -$3,435                       -$3,435

       cash flows related to financing activities
1.14   proceeds from issues of shares, options, etc                                            $0                             $0
1.15   proceeds from sale of forfeited shares                                                  $0                             $0
1.16   proceeds from borrowings                                                            $1,050                         $1,050
1.17   Repayment of borrowings                                                              -$736                         -$736
1.18   dividends paid                                                                          $0                             $0
1.19   other - share issue costs                                                               $0                             $0
       net financing cash flows                                                              $314                           $314
       net increase (decrease) in cash held                                                -$3,121                        -$3,121
1.20 cash at beginning of quarter/year to date                                            $5,543                         $5,543
1.21   Exchange Rate adjustments to item 1.20                                              -$282                          -$282
1.22   cash at end of quarter                                                              $2,140                         $2,140

Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related parties

                                                                                                                 current quarter
1.23   aggregate amount of payments to the parties included in item 1.2                                                    $285
1.24 aggregate amount of loans to the parties included in item 1.10                                                           nil
1.25   Explanation necessary for understanding the transactions

Non-cash financing and investing activities
2.1    details of financing and investing transactions which have had a material effect on consolidated assets and
       liabilities but did not involve cash flows

2.2    details of outlays made by other entities to establish or increase their share in which the reporting
       entity has an interest

+ see chapter 19 for defined terms
mInIng ExpLoRaTIon EnTITy quaRTERLy REpoRT
Buccaneer Energy Limited          aBn: 63 125 670 733
quarter ended (“current quarter”) 30 september 2010

Financing Facilities Available
add notes as necessary for an understanding of the position
                                                                           amount available                    amount used
                                                                                   $a’000                          $a’000
3.1   Loan facilities - macquarie Bank                                               $1,000                         $1,000
      pompano Letter of credit                                                       $1,257                          $1,257
3.2   credit standby arrangements                                                        Nil                             Nil

Estimated cash outflows for next quarter
4.1   Exploration and evaluation                                                                                     $260
4.2   development                                                                                                   $1,240
4.3   production (net Inflow)                                                                                       -$600
4.4   administration                                                                                                 $1,100
4.5   planned asset sales                                                                                            -$350
4.6   springTree drawdowns (Inflow)                                                                                -$2,100
4.7   Loan Repayments - maquarie Loc                                                                                  $355
      Total (Net Inflow)                                                                                              -$95
Reconciliation of Cash
Reconciliation of cash at the end of the quarter
                                                                            current quarter                previous quarter
(as shown in the consolidated statement of cash flows)
                                                                                    $a’000                          $a’000
to the related items in the accounts is as follows.
5.1    cash on hand and at bank                                                      $1,727                        $4,378
5.2   deposits at call                                                                   $0                           $587
5.3   Bank overdraft                                                                     $0                             $0
5.4   production revenue received by operator (pompano)
      & held on behalf of company                                                      $414                           $577
      Total: Cash at end of quarter (item 1.22)                                      $2,140                        $5,543

Changes in interests of mining tenements
                                                                                                 Interest at     Interest at
                                                              Tenement    nature of interest
                                                                                               beginning of          end of
                                                              Reference           (note (2))
                                                                                                    quarter         quarter
6.1   Interests in mining tenements
      relinquished, reduced or lapsed
6.2   Interests in mining tenements
      acquired or increased

+ see chapter 19 for defined terms
mInIng ExpLoRaTIon EnTITy quaRTERLy REpoRT
Buccaneer Energy Limited          aBn: 63 125 670 733
quarter ended (“current quarter”) 30 september 2010

Issued and quoted securities at end of current quarter
description includes rate of interest and any redemption or conversion rights together with prices and dates

                                                                    Total              number         Issue price per amount paid up per
                                                                  number                quoted        security (cents)   security (cents)
                                                                                                         (see note 3)       (see note 3)
7.1    preference shares +                                              nil

7.2    changes during the quarter
       (a) Increases through issues
       (b) decreases through returns of capital,
           buybacks, redemptions.
7.3    + ordinary securities                                494,347,574           494,347,574
7.4    changes during the quarter
       (a) Increases through issues
       (b) decreases through returns of capital,
        buybacks, redemptions.
7.5    + convertible debt securities                                    nil
       - performance shares

7.6    changes during the quarter                                       nil
       (a) Increases through issues
       (b) decreases through returns of capital,
        buybacks, redemptions.
                                                                                                       Exercise Price         Expiry Date
7.7    options
       options - Listed                                        177,731,313           177,731,318                 $0.10         30-nov-12
       options - macquarie Bank Limited                        15,443,077                    nil                  $0.11        02-feb-13
       options - springTree special opportunities, Lp         12,000,000                     nil               $0.1325         22-feb-13
       options - dEsop                                        47,550,000                     nil               $0.100         30-june-13
       Listed                                                  177,731,318                   nil
       unlisted                                               27,443,077
7.8    Exercised during quarter                                          5                                       $0.10
7.9    Issued during quarter                                  47,550,000                     nil                 $0.10        30-june-13
7.10 Expired during quarter (Lapsed)                                    nil                  nil
7.11   debentures                                                       nil
7.12   unsecured notes                                                  nil
1. This statement has been prepared under accounting policies which comply with accounting standards as defined in the
   corporations act or other standards acceptable to asx (see note 4).

2. This statement does give a true and fair view of the matters disclosed.

   signed: dean L gallegos

   date: 29 october 2010

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past
   quarter and the effect on its cash position. an entity wanting to disclose additional information is encouraged to do so, in a note
   or notes attached to this report.

2. The “nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised
   or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent
   which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and
   conditions precedent in the list required for items 6.1 and 6.2.

3. Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid shares.

4. The definitions in, and provisions of, aasB 1022: accounting for Extractive Industries and aasB 1026: statement of cash flows
   apply to this report.

5. Accounting Standards asx will accept, for example, the use of International accounting standards for foreign entities.
   If the standards used do not address a topic, the australian standard on that topic (if any) must be complied with.
dIREcToRs                            audIToRs
alan Broome, am - chairman           wHk Horwath sydney
curtis Burton - managing director    Level 15, 309 kent street
dean gallegos - director             sydnEy nsw 2000
frank culberson - director
                                     Telephone: + 61 2 9262 2155
                                     facsimile: + 61 2 9262 2190
company sEcRETaRy
Bruce Burrell                        soLIcIToRs To THE company
                                     Hopgood ganim Lawyers
REgIsTEREd offIcE &                  Level 8, waterfront place
coRpoRaTE HEad offIcE                1 Eagle street
Level 9, 25 Bligh street             BRIsBanE qLd 4000
sydnEy nsw 2000
                                     Telephone: +61 7 3024 0000
Telephone: + 61 2 9233 2520          facsimile: +61 7 3024 0300
facsimile: + 61 2 9233 2530          Email: contactus@hopgoodganim.com.au
Email: info@buccenergy.com
website: www.buccenergy.com          sHaRE REgIsTRy
                                     computershare Registry services pty Ltd
pRIncIpaL offIcE                     Level 3, 60 carrington street
952 Echo Lane, suite 420             sydnEy nsw 2000
Houston, Texas 77024 usa
                                     Telephone: 1 800 855 080
Telephone: + 1 713 468 1678          facsimile: 1 300 137 341
facsimile: + 1 713 468 3717          Email: web.queries@computershare.com.au
Email: info@buccaneerresources.com

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