Buru Energy Ltd (ASX:BRU) has received a positive re-rating from the market as the company has started monetising resources through the sale of oil from its wholly-owned Ungani Oilfield in the Canning Basin of Western Australia.
Buru shares last traded at $0.32, double their valuation from August 2017.
The company has now revealed that the oil bearing reservoir in the Ungani 5 well is similar in quality to the other wells in the Ungani Field, while also confirming there is an oil column of circa 53 metres in the well which is similar to the Ungani 2 oil column.
At Ungani 5, a full suite of good quality wireline logs including wireline pressure data has been acquired with no issues.
These results provide the basis for Buru to expand its known resources as these previously did not include any resources in the Ungani 5 area.
The Ungani 5 well is located 1,140 metres to the east of Ungani 1 on a separate drilling pad and is designed to appraise the oil pool discovered by the Ungani 3 well.
Weather update from Cyclone Hilda
The rain associated with Cyclone Hilda which is progressing down the Kimberley coast has affected Ungani operations.
Oil production from the Ungani Field is forecast to be shut-in for up to three days, and may also result in a short delay in running the completion on the Ungani 5 well.
As soon as the weather system has passed, the well will be completed with a series of swellable packers that will allow zonal isolation and separate testing of zones.
Ungani 4 to get underway
News flow will continue early in 2018, as the rig will be moved from Ungani 5 to Ungani 4.
Test programs on both wells and the tie-in of Ungani 4 will then be undertaken in mid to late January.
Ungani production and facilities
The company has completed the installation of new tanks at Ungani to increase the fluid handling at the field up to 8,000 barrels of fluid per day.
The tanks are now in service, with oil handling capacity more than doubling to 4,900 barrels.
As part of the recent work at the facility the Ungani 4 flowline has been substantially completed with the remaining work being the tie-ins to the wellhead and to the facility.
The Ungani 1ST1 and Ungani 2 wells have continued to perform in line with expectations with average production of 1,300 barrels of oil per day.
The Wyndham tank now has 45,600 barrels in storage, with the next lifting expected to be in the second week of January.