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Buru Energy plans next lifting of 70,000 barrels from Ungani Oilfield JV by year-end

The company expects a strong increase in field production once the Ungani 6ST1 well is completed and brought into production. Buru has also assumed 100% of its core permits in the Canning Basin and plans to introduce a new partner early next year.

Buru Energy Ltd - Buru Energy plans next lifting of 70,000 barrels from Ungani Oilfield JV by year-end
Buru continues to optimise production from Ungani 7 well

Buru Energy Limited (ASX:BRU) plans to lift another 70,000 barrels from the Ungani Oilfield joint venture in Western Australia by the end of this month.

This lifting will be made from the company’s contracted storage facilities at the Port of Wyndham.

It comes as Buru continues to optimise longer-term production from the Ungani 7 well including the running of a tubing string and a beam pump.

Aim to maximise production rates

Planning is also underway to install an electric submersible pump (ESP) in early 2020 aimed at maximising production rates from the well.

Field production has been averaging some 1,300 to 1,400 bopd, which will match tank tops in the Wyndham storage facility to the remaining 2019 lifting.

After this lifting, Buru expects to make the next lifting in late February or early March 2020, including an allowance for weather downtime.

6ST1 well steps

The company expects the next significant increase in field production once the Ungani 6ST1 well is completed and brought into production.

Timing of this is dependent on remobilisation of the Halliburton coil tubing unit, which is expected to be in late January or early February.

Completion of Ungani 6ST1 well requires a number of sequential operational steps, including drilling out of the cementing float shoe, successful re-penetration of the remaining Ungani Shale section, running and expansion of the liner section, and drilling of the horizontal laterals.

Each step has been subjected to detailed technical, operational and joint venture analysis and review to ensure the best chance of success.

A program of short and medium-term production enhancements of all the wells in the Ungani field has also been agreed by the JV to ensure production goals are met.

Buru Energy permit locations.

Blina Oilfield plans

Work continues on Buru’s 100%-owned Blina Oilfield, including testing of the Upper Yellowdrum zone and the deeper Nullara producing zone.

While testing operations on the Yellowdrum zone proved disappointing due to tight reservoir, this was offset by results from testing of the deeper Nullara zone, which the company described as excellent.

The Nullara was the main producing zone of the field before it was shut-in and the production test flowed at up to 700 bopd of essentially clean oil, with strong wellhead pressures.

This was a short flow period of several days but illustrates the potential of this reservoir for possible resumption of production.

Buru’s immediate forward program for the field includes interpretation of the extensive production and injection pressure data obtained during the recent test period.

This will allow quantification of the potential for longer-term production and the potential volume of the remaining recoverable reserves.

The review may lead to resumption of production from the field, including the potential for a water flood/pressure support program.

Greater flexibility

Following the recent transaction announced with Roc Oil, Buru now has title to the three core Fitzroy Graben exploration permits, subject to receipt of standard regulatory approvals.

Having 100% equity in these permits provides Buru with the flexibility to execute a fit for purpose exploration strategy, which may include additional seismic acquisition over key areas and prospects.

The 100% equity holdings without an existing JV partner will make these permits, and Buru’s other 100% and majority-owned permits, attractive to potential farm-in partners.

Technical review

Buru is undertaking a detailed regional technical review incorporating results of the recent exploration wells started last month to identify leads and targets additional to the defined prospect portfolio.

In parallel, an operational planning process is underway incorporating lessons learned from the 2019 drilling program to ensure issues encountered during the 2019 campaign can be resolved for the next campaign.

A detailed review of suitable rig and seismic crew availability is also underway in co-operation with other Western Australian onshore operators.

Farm-out process

This review process has the objective of beginning a strategic farm-out process during 2020.

Buru believes that the combination of an extensive, lightly explored, 100%-owned exploration portfolio with a low level of commitments, will prove highly attractive to local and international companies.

It is the company’s objective to partner with an experienced and strategically aligned E&P group with a focus on the extensive conventional oil exploration prospectivity of the permits, together with the further appraisal and development of the Yulleroo Gasfield with its established large-scale contingent and prospective resources for gas and liquids.

Once the regional and prospect technical review is completed, Buru intends to start a wide-ranging farm-out process early in 2020.

This will target companies that have shown previous interest in the basis as well as a number of international groups that have recently shown renewed interest in Australian exploration.

The prospect review process will include a review of 2020 exploration drilling activity that will be dependent in part on progress on farm-out negotiations and rig availability.

This, in turn, may be influenced by any decision by the Ungani JV to drill further development wells on the Ungani Oilfield.

Quick facts: Buru Energy Ltd

Price: 0.15 AUD

Market: ASX
Market Cap: $64.81 m

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