Buru set to cash in on surging oil price with Ungani payday

Buru Energy is set for a bumper payday from the latest lifting from its flagship Ungani oilfield in WA’s Kimberley region. The company is anticipating a $5.5 million cheque from its 50 per cent share of the 75,000 barrels shipped out of the Wyndham port this month.

The latest payment is likely to be more than $1m higher than its previous record in February and comes off the back of a very strong Brent oil price that is today sitting at around US$116 a barrel.

The oil’s buyer, BP, is delivering the crude to a south-east Asian refinery.

Ironically, the super major’s decision to close its Kwinana refinery to oil producers in the Perth and Carnarvon Basin has caused significant issues for a number of Buru’s fellow producers whilst the Wyndham export path to market has sailed through without disruption.

Buru noted the Free On Board price paid by BP will be based on the average dated Brent oil price for the month of July.  It shares the Ungani field with 50 per cent partner Roc Oil.

The company is also continuing its foray into base metals with a four-hole diamond drill campaign with joint-venture partner Sipa Resources. The program at its Barbwire Terrace project will see the two companies drilling geophysical and structural targets prospective for lead and zinc mineralisation as Buru continues its energy transition strategy.

Buru has logged numerous mineralised zones in its oil and gas wells and whilst they are usually too deep to be a target it has identified a number of areas where potential hydrothermal lead, zinc or silver orebodies are at a shallow enough depth for exploration. The diamond holes will punch through to about 500m depth.

The joint venture has a drill rig enroute to the project after completing  access tracks and drill pads with local traditional owner groups conducting cultural monitoring.

Finally, Buru says planned activities around the Rafael 1 gas condensate discovery from late last year will likely be pushed back as 50 per cent partner Origin Energy needs further time to get through its internal approvals.

The pair has been planning a 3D seismic survey over the discovery after further flow testing of the Rafael 1 well revealed a significant conventional gas and condensate resource in the Ungani dolomite and Upper Laurel carbonate reservoirs, 50km east of the Ungani oilfield.

An independent report has given the Rafael 1 well a contingent resource estimate of 1.02 trillion cubic feet of recoverable gas and 20.5 million barrels of condensate – however the report by consultant ERCE Energy said the figure was constrained by the mapped structural closure of the gas column at 634m.

Notably, management believes the interpretation of the pressure data implies that the column could be greater than the independently calculated 634m and be as large as 900m in depth.

With investment bank Goldman Sachs this week predicting an increase in the price of oil to reach US$140 later this year due to unresolved structural shortages it could become a wild ride for the WA oil player who currently has plenty of irons in the fire.

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