Roc Oil has agreed to buy a 50% interest in the Ungani Oilfield for a cash payment of $64 million.
The parties have also agreed for Roc to acquire a 50% interest in three exploration permits by paying $20 million of a planned $25 million exploration program.
Transactions provide funding, Buru to remain asset operator
These two transactions strengthen the company’s balance sheet and provide the funding to allow Buru to undertake an aggressive exploration program.
This exploration program will commence during this year’s Canning Basin drilling season.
Furthermore, Buru will remain as operator of the Ungani Oilfield and the exploration permits.
Deal secures a partnership with leading oil and gas company
Buru’s executive chairman Eric Streitberg said: “We are delighted to have formed a partnership with a highly experienced Australian based oil and gas company that has strong and aligned backing.
“The transaction recognises the strategic value and prospectivity of the company’s Canning Basin assets and Buru’s expertise and knowledge as operator in that area since 2006.
“It is also significant in that it provides Buru with the balance sheet strength to further develop the company’s assets from internal resources in the short to medium term.
“The exploration program will enable us to potentially replace and increase our oil resources and also allow us to drill the deeper higher value oil targets such as Rafael on an appropriately promoted cost sharing basis.
“The transactions place Buru on a strong footing that comes on the back of its very successful program in 2017 and we look forward to the future with confidence with our new partner.”
$13 million to be received immediately
Of the $64 million to be received for the Ungani Oilfield, $13 million will be received immediately.
The remaining $51 million of the purchase price is payable upon the government approval and registration of the Ungani production licence transfers.
Farm-in transaction does not include unconventional gas assets
The exploration farm-in is for permits EP 391, EP 428 and EP 436 and the $20 million will go towards a $25 million exploration program of up to four wells.
Notably, this farm-in does not include the Laurel Formation unconventional gas assets within the permits which will remain 100% owned by Buru.