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MarketScreener Homepage  >  Equities  >  AUSTRALIAN SECURITIES EXCHANGE LIMITED  >  Buru Energy Limited    BRU   AU000000BRU3

BURU ENERGY LIMITED

(BRU)
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End-of-day quote. End-of-day quote AUSTRALIAN SECURITIES EXCHANGE LIMITED - 09/16
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Buru Energy Limited : - Quarterly Activities and Cash Flow Report June 2019

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07/26/2019 | 09:04am EDT

Buru Energy Limited (Buru) provides the report for the quarter ended 30 June 2019.

Highlights

Ungani Production

Oil production for the quarter of 88,000 bbls (gross) at an average of 970bopd (including well offline time).

Oil sales for the quarter of 74,000 barrels (gross) from a lifting on 23 May.

Ungani Development: Ungani 6H development well initial section completed with NGD 405 rig after significant drilling problems.

Ungani 7H well delayed to allow for well design changes incorporating lessons learned from Ungani 6H drilling issues.

Upgrades to Ungani production facility to process additional fluid volumes from new wells progressing on time and on budget.

Exploration and Appraisal

Adoxa 1 exploration well, the first exploration well in the 2019 drilling campaign, spudded on 24 July.

Rafael 1 and Miani 1 well planning and site construction advanced to allow flexibility in forward exploration drilling program.

Ungani North re-evaluation program commenced with tubing removal with Buru Jacking Platform.

Blina Oilfield re-appraisal program commenced with tubing removal and recovery of significant volumes of oil.

Operational and technical program for Yulleroo Gasfield conventional gas appraisal program being completed.

Lennard Shelf well decommissioning using the Buru Jacking Platform 50% complete and on time and on budget.

Ungani Oilfield Production and Development

Production

Production from the Ungani Oilfield for the quarter totalled 88,000 bbls (gross) at an average daily rate over the period including well offline time of 970bopd (March quarter 93,000 bbls at 1,030 bopd). Production continued from Ungani 1, Ungani 2, Ungani 4ST1, Ungani 5 and Ungani Far West 1 throughout the period with ongoing minor well interventions and maintenance being carried out as required. Production will be confined to the currently producing wells until the Ungani 6 well is brought on production later this year. There was one oil lifting during the quarter from Wyndham Port by the MT Ocean Autumn on 23 May. This lifting totalled 74,000 bbls (gross) for an FOB price of A$95bbl. Buru's 50% revenue share from the lifting was US$2.46M or A$3.52M.

The existing Trafigura oil sales and lifting contract expired on 30 June 2019, and after a market based tender process, a new contract on more favourable commercial terms has been executed with Petro-Diamond Singapore. Trafigura had provided an excellent service since mid-2017 and will remain in consideration for future contracts. The next lifting, the first for Petro Diamond, is scheduled to take place in August. Ungani crude oil continues to be trucked to CGL storage Tank 10 at Wyndham Port prior to its FOB sale. The price received FOB Wyndham is the realised Brent linked oil price less the buyer's fixed marine transport discount.

Ungani 6H

During the quarter, the Buru/Roc Joint Venture drilled the Ungani 6H development well with the NGD 405 drilling rig. Drilling was significantly delayed by a number of operational problems including rig downtime, lost circulation zones and difficult drilling conditions in the Ungani Shale section.

The well was drilled at a high angle to the top of the Ungani Dolomite which was intersected as planned at a measured depth of 2,346 metres. Attempts to then run the 51/2 inch (140mm) casing to the planned depth at the top of the Ungani Dolomite were ultimately unsuccessful, and the casing was cemented in place at a depth of 2,310 metres measured depth and the well was suspended. The NGD 405 rig then underwent a period of required maintenance and repairs before being mobilised to drill the Adoxa 1 well. The forward plan is to run an expandable liner over the remaining shale section using the Buru Jacking Platform prior to the underbalanced coil tubing unit drilling of the reservoir section.

Ungani 7H

The Ungani 7H well location is adjacent to the Ungani 4 well pad and the well location is completed and ready for rig acceptance. However, given the issues encountered with the Ungani 6H well it has been agreed by the Joint Venture that the drilling of the well will be deferred while the well design is reviewed in light of the lessons learned from the drilling of Ungani 6H, and to provide sufficient time for the implementation of any subsequent changes to the well design. The well location is also accessible during the wet season which provides flexibility on timing.

Coil Tubing Operations

The preparations for the coil tubing operation are substantially complete and it is intended to mobilise the equipment spread once the expandable liner in Ungani 6H is successfully installed. These operations are currently expected to be completed late in the third quarter. The coil tubing unit is expected to be demobilised at the conclusion of the Ungani 6H operation and then remobilised as required for any subsequent operations on Ungani 7H.

Ungani Production Facility Upgrades

Further upgrades to the Ungani Production Facility are progressing with upgrade operations on time and budget. The facility is being debottlenecked and expanded to handle the expected increased oil production from Ungani 6H and Ungani 7H, as well as the increased produced water from the field generally. This expansion involves the installation of new tanks and associated infrastructure to tie the new wells into the facility.

Exploration

Adoxa 1 (EP428 - Buru Energy 50% and operator)

The Adoxa 1 site and the access road were completed during the quarter. The well was spudded on 24 July is currently drilling ahead in 8-1/2' hole to the section TD of 750 - 800 metres. Adoxa 1 is situated on the regionally significant Yakka Munga structure and planned to be drilled to a total depth of some 2,400 metres with its principal objective being conventional oil from the Reeves Formation sandstones from which oil was tested in the Ungani Far West 1 well. The Reeves Formation is an emerging play in the Canning Basin and the Reeves section in the Adoxa 1 well is prognosed to be over 700 metres thick, with a substantial part of the section never previously penetrated in the Basin.

The Adoxa 1 well is located on EP 428 in which Roc is earning a 50% interest under the terms of the 2018 Farmin Agreement. Pursuant to that Agreement, Roc is required to fund $25 million of agreed exploration expenditures on a promoted 80/20 basis ('Farmin Carry'). For the purpose of drilling the Adoxa 1 well, the parties have agreed that this well is funded outside the Farmin Carry, with both Roc and Buru paying for this well at the 50/50 equity level. However, Roc remains liable to meet their remaining Farmin Carry obligations (currently approx. $15 million Roc's share) within an agreed timeframe pursuant to the terms of the Farmin Agreement.

Rafael 1 (EP428 - Buru Energy 50% and operator)

The Rafael prospect lies in the southern part of EP 428 and is a large robust closure mapped on good quality 2D seismic data with conventional oil targets. The drill site and access road for the well have now been completed and the final well proposal has been presented to the Joint Venture and is currently under review. If Roc decline to participate in the well and it is drilled by Buru as a 100% 'sole risk' operation, Roc will be required to pay an agreed penalty if they wish to participate in a subsequent appraisal or development program.

Miani 1 (L8 - Buru Energy 100%)

The prospect previously known as Hotdog has been renamed Miani, the common usage name of the blue waterlily that is endemic to the northern Kimberley. The Miani prospect is well defined on 3D seismic and is interpreted to be a hydrothermal dolomite sag feature prospective for conventional oil. There are a number of well defined follow up features defined on the 3D seismic that would be attractive targets if Miani 1 discovers hydrocarbons. The Miani 1 well site has environmental and heritage clearances and construction of the site and access road have commenced. It is close to the access road to the existing Leander 1 wellsite and has good all weather access along the existing Blina road and the sealed portion of the Gibb River Road.

Ungani North 1 (L20 - Buru Energy 50% and operator)

As part of the review of the potential of the wells in the Ungani area the Joint Venture has agreed to undertake further appraisal work on the Ungani North 1 well. During the quarter the existing completion string has been removed using the Buru Jacking Platform in preparation for the upcoming re-perforation of the Ungani Dolomite oil zone.

Lennard Shelf (EP 129/L 6/L 8/L 17 - Buru Energy 100%)

Blina and Sundown Oilfield

The Blina and Sundown Oilfields remained shut-in during the quarter with well decommissioning operations proceeding using Buru's Jacking Platform system. This system provides a low cost, safe and effective alternative to using a workover rig for these types of operations. As at the end of the quarter, these operations were 50% complete and progressing on time and on budget.

Blina Yellowdrum Test

In preparation for the planned workover and test of the Yellowdrum section in the Blina 4 well, the Jacking Platform has been used to remove the existing tubing string which was completed at the deeper Nullara Formation level. During this operation initial flush production of some 600 barrels of oil was recovered at high flow rates. After the flush production had completed flowing, the tubing string was recovered. This was an encouraging result and the significance of this oil recovery and its implications for the forward program is being reviewed.

Butler Prospect

No further work has been undertaken on the Butler prospect as the program delays mean it is unlikely to be able to be drilled in 2019.

Yulleroo Gasfield (EP 391 & EP 436 - Buru Energy 50% and operator of the conventional gas assets / 100% of the unconventional gas assets) Buru has full title to the extensive tight wet gas resources of the Laurel Formation in its permits through the central part of the Fitzroy Trough of the Canning Basin. The most well developed of these resources is the Yulleroo Gasfield where four wells have defined a substantial gas accumulation with a number of zones identified from which there is potential for conventional gas production.

A detailed program to evaluate these conventional gas resources is currently being finalised. Conventional gas resources could be used to supply local industry and power generation as a substitute for LNG trucked from the Pilbara.

Financial

Production: Net production cash flows included Buru's share of Ungani crude production sold FOB Wyndham during the quarter, less production cash costs. As described above, receipts in the June quarter were from one lifting, as opposed to two liftings in the prior quarter.

Development: Cash outflows primarily comprised of Buru's share of costs associated with the Ungani 6H development well, as well as preparations for the Ungani 7H well and various well workovers and minor surface upgrades. The majority of cash outflows for the Ungani 6H well will be reflected in the September quarter.

Exploration: Cash outflows comprised Buru's share of preparation for the Adoxa 1, Rafael 1 and Miani 1 exploration wells as well as the ongoing expenditures relating to desktop geological and geophysical work, asset integrity and Traditional Owner engagement.

Administration and corporate: Cash outflows were consistent with prior quarters.

Contact:

Tel: +61 8 9215 1800

Email: info@buruenergy.com

About Buru Energy

Buru Energy Limited (ASX: BRU) is a Western Australian oil and gas exploration and production company headquartered in Perth with an operational office in Broome. The Company's petroleum assets and tenements are located onshore in the Canning Basin in the southwest Kimberley region of Western Australia. It owns and operates 50% of its flagship high quality conventional Ungani Oilfield project and 100% of its potentially world class tight gas resources. The company's goal is to deliver material benefits to its shareholders, the State of Western Australia, the Traditional Owners of the areas in which it operates, and the Kimberley community, by successfully exploring for and developing the petroleum resources of the Canning Basin in an environmentally and culturally sensitive manner.

Forward Looking Statements

This document has been prepared by Buru Energy Limited ABN 71 130 651 437 ('Buru Energy'). This document contains certain statements which may constitute 'forward-looking statements'. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including, but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve and resource estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delays or advancements, approvals and cost estimates. Buru Energy's operations and activities are subject to regulatory and other approvals and their timing and order may also be affected by weather, availability of equipment and materials and land access arrangements, including native title arrangements.

Although Buru Energy believes that the expectations raised in this document are reasonable there can be no certainty that the events or operations described in this document will occur in the timeframe or order presented or at all. No representation or warranty, expressed or implied, is made by Buru Energy or any other person that the material contained in this document will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of Buru Energy, its officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this document and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this document or any error or omission there from. All dates in this document are for calendar years. All references to $ are in Australian currency, unless stated otherwise.

(C) 2019 Electronic News Publishing, source ENP Newswire

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Sales 2019 27,2 M
EBIT 2019 2,90 M
Net income 2019 2,90 M
Finance 2019 51,9 M
Yield 2019 -
P/E ratio 2019 38,6x
P/E ratio 2020 38,6x
EV / Sales2019 2,38x
EV / Sales2020 4,67x
Capitalization 117 M
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Average target price 0,45  AUD
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Spread / Highest target 66,7%
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Eric Charles Streitberg Executive Chairman
Mark Royle Operations Manager
Shane McDermott Secretary & Head-Finance
Eve Alexandra Howell Independent Non-Executive Director
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