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Buru Energy set to restart oil production from Ungani

Published: 11:00 10 Mar 2017 AEDT

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Export will be with a larger tank driving improved economics

Buru Energy (ASX:BRU) has completed a restart plan for its 50% owned and operated onshore Ungani Oilfield project located 150 kilometres east of Broome, Western Australia.

Production from the field will be trucked to the port at Wyndham and exported via ship in 80,000 barrel ships to southeast Asian or local markets.

Previous oil export from Wyndham was through a smaller 30,000 barrel tank, and the larger 80,000 barrel tank to be used for the restart brings significant economies of scale and commercial benefits through access to larger ships.

The restart is subject to final joint venture and regulatory approvals and award of the various necessary contracts.

Eric Streitberg, executive chairman, commented:

"The plan to commence export through Wyndham commencing in mid-2017 takes advantage of existing infrastructure that was not previously available, with its improved margins and early utilisation."

The Ungani field has been shut in for over a year after oil prices collapsed to US$30 a barrel.

Buru have taken the time since then to substantially reduce their operating and transport costs.

The restart will provide significant cash flow and is transformational for the company, particularly if production rates are increased when artificial lift is installed later this year.


Ungani restart details

Timing of the restart is dependent on the 80,000 barrel tank returning from diesel service and the required minor modifications being completed, with a mid-year target start date.

A tender process for the contract for transporting the crude from the Ungani Oilfield to Wyndham is currently in progress, together with a detailed review of the safety systems for the trucking operation.

Some minor modifications to the Ungani Oilfield will also be undertaken prior to start-up with the field initially produced on natural flow at a target rate of 1,200 barrels per day.

An artificial lift (electrical submersible pumps) is planned to be installed later in 2017 to maintain and potentially increase production rates.

The restart is subject to final joint venture and regulatory approvals and award of the various necessary contracts.


Background

Buru is a Western Australian oil and gas exploration and production company with petroleum assets and tenements located onshore in the Canning Basin in the southwest Kimberley region of Western Australia.

Its flagship high quality conventional Ungani Oilfield project is owned in 50/50 joint venture with Diamond Resources (Fitzroy) Pty Ltd (Mitsubishi).

As well as Ungani, the company’s portfolio includes world class tight gas resources in the Laurel Formation, with extensive 2C gas resources identified at Yulleroo and in EP 371 in the Asgard and Valhalla North wells.

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