RIU GoodOilConference Perth welcomed a series of leading professionals to the stage on Thursday, playing host to Buru Energy Ltd (ASX:BRU) executive chairman Eric Streitberg and Geological Survey of Western Australia geophysicist Alex Zhan who both spoke about the state’s Canning Basin.
Buru’s chairman Streitberg took the stage with the company beginning preparations for a drilling campaign for Ungani 4 well.
The company and wellfield operator is hoping to increase the productivity of the well it holds with its 50%-partner Roc Oil (Canning) Pty Ltd.
The Roc Oil subsidiary and Buru are also 50% partners the host petroleum licence, L20.
Streitberg described the play-opening conventional Ungani oil field as a “very easy, simple system.”
Ungani is an onshore oil field in the Canning Basin, about 100 kilometres east of Broome in the Kimberly region of Western Australia.
Streitberg shared Buru was targeting 1,800 barrels of oil a day at the field and aiming to reach 3,000, with the quality of the oil being a high-quality 37 deg API.
The company’s first 1 million barrels is a milestone to be met this month.
Buru assets in northern Australia.
The Canning Basin
Ungani is one of a number of fields discovered in the onshore-and-offshore basin, as highlighted after lunch by Department of Mines, Industry Regulation and Safety senior geophysicist Alex Zhan of the state’s Geological Survey of Western Australian.
Khan highlighted the government’s efforts to increase the quality of information held on the largely-onshore basin that extends from the coast into the northeast of Australia.
Zhan flagged about 300 wells had been historically drilled to produce largely 2D seismic information.
The WA government has completed and published an airborne gravity of the Canning Basin.
Buru sourced its own 3D data, acquiring a Falcon AGG survey of about 38,800 square kilometres of the basin.
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The Falcon data took in the southwest margin of Fitzroy Trough and Gregory Sub-basin.
Geological Survey geophysicist Zhan acknowledged: “Over the last 30 years, several oil fields have been discovered, including Ungani, Blina, Sudown, Boundary and West Terra
There are “approximately 300 wells in an area as big as Perth.”
“It is very much unexplored, with huge potential, and as a government agency we increase the (geo)-coverage and enhance the geological understanding.”
The agency completed and released its own airborne gravity survey.
Zhan said: “The new data has lots of information compared to the old ground survey.”
“With this data, we will be able to avoid erroneous interpretation and capture the real geography.”
An aerial view of Buru's operation.
Buru welcomes new players to basin
Buru executive chairman Streitberg noted the producer had been alone in the Canning Basin for a long time but welcomed new companies to the basin.
Streitberg said: “Very recently we’d begun to share the basin with a number of other people coming in, Finder, focused on unconventional oil on the Broome platform and the Squadron Offshore Group, which is backed by Mindaroo, the Andrew Forrest’s company, and put a big footprint on the basin outside the Fitzroy trough.
“That’s been a great outcome for us because there’s no operators on the basin, we’re starting to have a bit more synergy and activity.”
Buru views the basin as having high prospectivity.
The company’s operating costs at Ungani are about $30-35 a barrel.
Streitberg said: “It’s not a complicated oilfield to produce.”
The company started sidetracking the partly-owned Ungani 4 well this month, issuing its a weekly drilling update report to the market on Wednesday.
Buru hopes to improve the productivity of the well with its latest operations which are expected to take about 20 days.
Streitberg noted comments from Argonaut Limited research director Michael Eidne who flagged funds were looking to invest in companies with a market capitalisation of greater than about $100 million.
Buru’s Streitberg said: “Investors are looking for companies that have (key) criteria and also with a market cap of over $100 million, well, of course, we’ve just (been) over a $100 million.
“Interestingly enough, we will have close to $70 million cash when our current deal closes shortly which values the rest of the assets we have, including the producing oilfield at $30 million, so there’s plenty of upside in there, particularly with the exploration program.”
“We’re about to start our drilling program again. We’re all very focused on making this company a success.
“It’s a nice tight little company.”
Buru also has unconventional projects in its portfolio, with Streitberg noting the tabling of a report into fracking in state parliament.
If the State Government opts to back fracking, it could change the prospects of a number of listed companies.