Buru Energy : Quarterly Activities and Cash Flow Report - September 2019

Quarterly Report

Period ended 30 September 2019

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

Highlights

Ungani Production:

• Oil production for the quarter of ~86,000 bbls (gross) at an average of ~940bopd including well offline time.

ASX:• OilBRUsales for the quarter of ~75,000 barrels (gross) from a lifting on 12 August.

Ungani Development:

• Ungani 7H development initial well section successfully drilled on time and on budget with NGD 405 rig.
• Upgrades to Ungani production facility to process additional fluid volumes from new wells completed on time and on budget.
• Coil tubing operations to be undertaken at Ungani 6H and Ungani 7H during the December 2019 quarter.

Exploration and Appraisal

• Adoxa 1 exploration well drilled and completed with potential ~10 metre oil zone
• Miani 1 well spudded after the end of the quarter, Rafael 1 exploration well deferred
• Lennard Shelf well decommissioning program completed
• Blina 4 well recompleted in preparation for well test
• Ungani North reperforation unsuccessful in improving productivity

Ungani Oilfield Production and Development

(L20/L21 - Buru Energy 50% and operator)

Production

Production from the Ungani Oilfield for the quarter totalled ~86,000 bbls (gross) at an average daily rate over the period (including well offline time) of ~940bopd (June quarter 88,000 bbls at ~970 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.

The Ungani 6H and Ungani 7H wells are planned to be brought onto production during the December 2019 quarter after coil tubing operations have been completed, with the potential for a significant increase in oil production rates.

Ungani crude sales for the quarter totalled ~75,000 bbls (gross) at an FOB price of ~A$81bbl from a lifting on 12 August by the MT Ribe Maersk. Buru's 50% revenue share from the lifting was ~A$3.1M. This was the first lifting with the Joint Venture's new offtake partner Petro-Diamond Singapore Pte Ltd.

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.

1

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

Ungani 7H

During the quarter, the Buru/Roc Oil (Canning) Pty Ltd (ROC) Joint Venture drilled the Ungani 7H development well initial section with the NGD 405 rig. The well was drilled as a highly deviated well from a surface location on the Ungani 4ST1 well pad in a northwesterly direction to intersect the Ungani Dolomite reservoir within the main Ungani Field area.

The well was spudded on 26 August and drilled to a total measured depth of 2,237 metres (total vertical depth of 2,142 metres). The top of the Ungani Dolomite reservoir is interpreted from drill rate and drill cuttings to have been encountered as prognosed at 2,224 metres measured depth with good to excellent oil shows observed. The intersection is some 88 metres in vertical elevation from the original Ungani Field oil water contact.

A 4½ inch (114 mm) liner was run and cemented into to the top of the dolomite at 2,236 metres measured depth. This provides the appropriate casing size for the reservoir section to be drilled underbalanced with coiled tubing. The NGD405 rig was released from the well on 21 September.

Ungani 6H

During the June 2019 quarter, the Buru/ROC Joint Venture drilled the Ungani 6H development well with the NGD 405 drilling rig with 5½ inch casing cemented in place at a depth of 2,310 metres measured depth and the well then suspended. An expandable liner is required to be run over a short section of exposed Ungani Shale below the casing. The liner insertion will be undertaken by the coil tubing unit being used for the horizontal lateral drilling program instead of the Buru Jacking Platform (BJP) as further analysis showed that the operational requirements would exceed the capabilities of the BJP.

2

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

Coil Tubing Operations

Subsequent to the end of the quarter, the equipment required for the planned underbalanced coil tubing drilling operations has been mobilised and at the date of this report was being rigged up at Ungani 7H. Once the reservoir section has been drilled at Ungani 7H, the coil tubing unit will mobilise to Ungani 6H to first run the expandable liner, and then drill the reservoir section at that well.

It is expected that these operations will be completed by the end of November and the Ungani 6H and 7H wells will then be immediately brought onto production.

Ungani Production Facility Upgrades

The further upgrades to the Ungani Production Facility have now been completed on time and budget. The facility has been debottlenecked and expanded to handle the expected increased oil production from the two new wells, as well as the increased produced water from the field generally. The expansion involved the installation of new tanks and associated infrastructure.

Installation of additional fluid separation tanks at the Ungani Production Facility

3

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

Exploration

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

The Adoxa 1 well was drilled during the quarter with the NGD 405 rig with both Buru and ROC contributing 50% of the cost of the well. The well was drilled to a total depth of 2,300 metres and an extensive suite of wireline logs and pressure measurements were then acquired. These identified a zone from 1,891 to 1,902 metres measured depth ("1900 zone") in the Upper Anderson section that is interpreted from logs and pressure data to have the potential to flow oil. All of the other zones where oil shows were noted in the well were interpreted to be either tight (poor reservoir) or water wet. A 4½ inch casing string was run in the well to allow a test of the well in due course.

Miani 1 (L8 - Buru Energy 100%)

The Miani 1 exploration well was spudded on 2 October with the NGD 405 rig as a vertical well to a planned total measured depth of 2,400 metres. The Miani 1 well is located on Production Licence L8 some 70 kilometers to the east of the town of Derby and some 30 kilometers to the northwest of Buru's Blina Oilfield. Buru Energy has 100% equity in the well and in L8. At the date of this report the drilling of the well was in progress.

4

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

The objective of the well is conventional oil hosted in a stratigraphic trap interpreted to have been formed by a fault bounded collapse feature enhanced by hydrothermal dolomitisation of the Nullara reefal carbonates. The feature being tested by the Miani 1 well has the potential to hold significant resources of conventional oil in a new play type. Development of any oil discovered would be facilitated by the availability of local infrastructure and the location of the well in an existing production licence.

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

During the quarter, and after careful review of the 2019 drilling program progress, the Buru Board took the decision to defer the planned drilling of the Rafael 1 exploration well. The prudent commercial decision to defer the drilling of this higher cost well was driven by a number of factors including Buru's exposure to 100% of the costs of drilling the well under the joint venture sole risk provisions, following ROC's decision not to participate in its drilling this year.

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

The Ungani Dolomite section in Ungani North has previously been perforated and tested and demonstrated to be able to produce oil at low rates. The effectiveness of previous perforations had been limited by the small size of the production tubing string in the well. During the quarter, the production tubing was removed with the BJP and the well was reperforated with larger equipment. An injection test was then undertaken that showed the reperforation had not been successful in enhancing the productivity. Consequently, operations at the well were suspended pending an evaluation of the results.

Lennard Shelf (EP129/L6/L8/L17 - Buru Energy 100%)

Blina and Sundown Oilfield

The Blina and Sundown Oilfields remain shut-in. The well decommissioning program using the BJP was completed during the quarter with seven wells successfully decommissioned.

Blina 4 Test

The BJP also removed the existing tubing string at Blina 4 and wireline operations were then undertaken to perforate the upper part of the Yellowdrum Dolomite section. A dual zone completion was then run into the well and production tests are planned on the Yellowdrum and Nullara formations during the December 2019 quarter once equipment and personnel are available. A reservoir model is currently being built to review the potential for a secondary recovery production operation in the Nullara reservoir of the field.

Yulleroo Gasfield (EP 391 & EP 436 - Buru Energy 50% and operator of the conventional gas assets / 100% of the unconventional gas assets)

The Yulleroo Gasfield includes four wells that have defined a substantial gas accumulation with a number of zones identified that have the potential for conventional gas production. A testing program to evaluate these conventional gas resources is planned during the December 2019 quarter. Conventional gas resources could be used to supply local industry and power generation as a substitute for LNG trucked from the Pilbara.

5

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437