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Buru Energy oilfield production drill campaign underway

Buru expects to solidly drill the Ungani West 1 exploration well for 32 days before moving equipment back to Ungani 4ST1 well.

Ungani oilfield workers
Buru is undertaking a systematic drilling campaign.

Buru Energy Ltd (ASX:BRU) is continuing production drilling activities at the Ungani oilfield in Western Australia’s Canning Basin.

The company’s drill program takes in assets such as Ungani West 1 and Ungani 4ST1 wells onshore in the basin.

READ: Buru Energy gets good flow rates from Ungani Far West, begins Ungani 4 sidetrack operations, Roc Oil farm-in completed

This week, Buru has been moving a DDGT1 rig to its Ungani West 1 exploration well.

Drilling is expected to take 32 days before the rig is moved back to Ungani 4ST1 so the company can wrap up Ungani Dolomite reservoir section drilling.

Equipment to reconfigure the top of the reservoir lining at Ungani 4ST1 is in transit from an overseas supplier and is expected next week.

Workers unload Buru oil at Wyndham storage tank.

Workers unload Buru oil at Wyndham storage tank.

Buru has already completed sidetrack operations at Ungani 4 with the intention of improving well productivity with drilling.

Buru previously shared it believed the likely explanation for past underperformance at the well was a complex and sub-optimal completion that was run to isolate its overlying unstable Laurel Shale section.

Another possibility flagged was well performance could have been affected by the reservoir being less well-developed at this location.

Buru is updating the market each trading week as it undertakes its activities and progresses its drilling efforts.

READ: Buru Energy production at Ungani oilfield nears 1 million barrels, Trafigura lifts another 51,962 barrels

Oilfield operator Buru is exploring three exploration permits with its farm-in partner Roc Oil (Canning) Pty Limited in the basin about 100 kilometres east of Broome in the Kimberly region.

Roc Oil’s agreement with Buru was formalised back in August with the termination of a legacy agreement from 2012 which Buru held with the Government of Western Australia.

The transaction was completed late last month after Roc met its conditions by paying $13 million upfront payment to Buru and $51 million after the state’s Department of Mines, Industry Regulation and Safety approved and registered Ungani licence name transfers required under the deal.

Roc was to farm into its 50% interest in the three exploration permits by committing $20 million to exploration on the permits.

Partner Roc now has a 50% equity interest in Ungani 4ST1 well and in production licence L20 which it is located upon.

READ: RIU GoodOilConference examines State’s Canning Basin

An aerial view of activity at drilling operations at Ungani 5 last year.

An aerial view of activity at drilling operations at Ungani 5 last year.

Buru waved off a ship in the Kimberley port of Wyndham in August containing more oil that its partner Trafigura lifted from its CGL storage Tank 10 at the port town.

Trucks transport oil from the Ungani oilfield to Wyndham.

Trafigura buys Buru oil free-on-board at the port town at a fixed discount to Brent oil prices to account for the shipping costs of visiting regional refineries.

Trafigura’s August lifting of 51,962 barrels gross from the 80,000-barrel storage tank attracted a provisional received price of $88.38 per barrel, with Buru’s share being from 25,981 barrels.

Production at Ungani Far West 1 has delivered high fluid rates of 1,000 barrels a day with about 50% oil cut at the oilfield.

The company neared the 1 million barrels production milestone last quarter and had been working towards a production target of 1,800 barrels a day in mid-September.

Buru’s current operating costs lie between $30 and $35 a barrel.

 

Buru’s longer term plan is to produce 3,000 barrels a day, its executive chairman Eric Streitberg highlighted at last month’s GoodOilConference Perth.

Streitberg described the play-opening conventional Ungani oil field as a “very easy, simple system.”

“It’s not a complicated oilfield to produce.”

Streitberg reported the company was focused on upping its production take with efforts to enhance wells, de-bottleneck and commission additional production wells.

The company may introduce Ungani South and Ungani East production wells, and horizontals next year.

Buru has 22,000 gross square kilometres of acreage in the Canning Basin, or 13,074 square kilometres net.

Quick facts: Buru Energy Ltd

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