Ungani is an onshore oil field in the Canning Basin, about 100 kilometres east of Broome in the Kimberly region of Western Australia.
The company is also now proceeding with its farm-in transaction with Roc Oil (Canning) Pty Limited following official termination of a legacy agreement with the WA Government.
READ: Buru Energy production at Ungani oilfield nears 1 million barrels, Trafigura lifts another 51,962 barrels
Sidetrack operations at Ungani 4 began with removal of the beam pump and preparations for the installation of a DDGT rig over the well.
The operation is expected to take 14 days to drill to the new bottom hole location, which is 60 metres southwest of the current bottom hole location, and 20 days in total to complete the operation.
The sidetrack at Ungani 4 is being drilled with the objective of improving well productivity, which has been below expectations.
Buru tenements in the Canning Basin.
Buru believes the most likely explanation for the underperformance is the complex and sub-optimal completion that was run to attempt to isolate the overlying unstable Laurel Shale section.
There also remains the possibility that the well performance has been affected by the Ungani Dolomite reservoir being less well-developed at this location.
The reservoir quality was unable to be determined from the restricted suite of logs obtained from the well.
If the underperformance is explained by the reservoir being less developed, there is a provision for the well to be sidetracked again to the north towards currently producing wells.
Production testing at Ungani Far West 1
Operations to production test the Ungani Far West 1 well have begun, with the well producing at high daily fluid rates of 1,000 barrels at about 50% oil cut.
The initial production test and clean up flows will determine the productive capacity of the well prior to running the artificial lift system (beam pump).
After the Ungani 4 sidetrack is completed, the rig will be moved to drill the Ungani West 1 exploration well where site preparations are close to complete.
Farm-in now unconditional
The farm-in with Roc Oil pertains to Roc acquiring a 50% interest in three Canning Basin exploration permits by paying $20 million of the next $25 million of exploration expenditure on the permits.
It was conditional on the termination, by an Act of the Parliament of Western Australia, of a state agreement dated November 7, 2012.
After being approved by the WA Legislative Assembly and the Legislative Council, the act has received royal assent and is an Act of Parliament as of August 21, 2018.
Consequently, the farm-in agreement with Roc Oil is now unconditional.