Kimberley gas aspirant Buru Energy will cut its workforce by 40 per cent, following a comprehensive review designed to reduce spending by $3 million each year.
Kimberley gas aspirant Buru Energy will cut its workforce by 40 per cent, following a comprehensive review designed to reduce spending by $3 million each year.
Buru announced the cuts ahead of its annual general meeting today, while revealing a plan to reduce director fees and a call by chief executive Thomas Nador to forego his 2024 incentives.
The measures come as Buru seeks to refocus its business on the development of the Rafael gas project and suspends all non-core exploration in the Canning Basin.
Buru spent $3.4 million during the September quarter, including $2 million on exploration, leaving it with a cash balance of $7.5 million.
The company discovered Rafael in 2021 and hopes to develop the project to supply the Kimberley market with a local source of gas and condensate, replacing diesel.
Mr Nador said the cuts would facilitate an increased focus on Rafael’s development.
“This is an important decision for the company and a clear demonstration of what is required to deliver the Rafael project,” he said.
“Buru Energy has a great asset in Rafael, and with focus and capital discipline the plan is to build a Kimberley gas business that will generate enduring material cash flows and significantly increased shareholder returns.
“Decisions on headcount reductions are not easy.
“We are very mindful of the impact organisational change can have on individuals and their families.
“To this end, I thank the people that have supported us in the past, and the team that will take us into the future.”
Buru previously generated cash flow from its Unagi oilfield under a 50:50 joint venture with ROC Oil, where production was suspended in August last year due to uncertainty associated with road infrastructure at Fitzroy Crossing.
Oil from Unagi was trucked to Wyndham, with the route disrupted by flooding that destroyed the Fitzroy Crossing bridge at the beginning of 2023.
ROC’s withdrawal from the JV resulted in Buru shopping the product around, and an earn-in deal was struck with Sabre Energy to take up a 70 per cent stake in the project for $6 million.
The Sabre deal, which would have funded exploration wells at Rafael Shallow and Mars 1 prospects, subsequently fell through.
Buru then struck agreements with two entities associated with long-term shareholders to fund the exploration at Rafael Shallow in exchange for a stake in the project.
Buru’s share price has struggled as a result of its challenges and is currently around 4 cents after entering the year at 11 cents.
It peaked as high as 26 cents in January 2022.
Ahead of today’s AGM, Buru chair David Maxwell said the board was mindful of the poor share price performance in strategising for the years ahead.
“It is important we recognise the need for clear and unambiguous focus,” he said.
“Our size and balance sheet means we have to rationalise our activities.
“Clear decisions and action are required.”
Mr Maxwell said Buru would focus on Rafael and was assessing an opportunity to restart production at Unagi, with a caveat that any actions there would need to add value.
Buru shares were 4.5 per cent lower in early trade and currently sit at 4.2c.
