Buru Energy : Quarterly Activities and Cash Flow Report - September 2020

Quarterly Report

Period ended 30 September 2020

Buru Energy Limited (Buru) provides the quarterly report for the period ended 30 September 2020.

Highlights

Ungani Oil Production and Sales

ASX: BRU

• Oil sales for the quarter of ~146,000 barrels (gross) from liftings in July and September
• New marketing agreement executed with BP Singapore for Ungani oil sales
• Ungani 7 ESP installation successfully completed
• Oil production for the quarter of ~93,000 barrels (gross) at an average rate of ~1,010 barrels a day including downtime for the installation of the Ungani 7 ESP
• Successful recompletion of Ungani Far West Reeves interval with initial test flow rates of ~270 bopd

Exploration

• Preparations for extensive 2021 exploration program advancing
• Farmout process ongoing
• Canning Basin hydrothermal mineral exploration agreement initiated

Corporate

• Balance sheet remains strong with cash and cash equivalents balance of $23.3 million

Ungani Oilfield

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

Production

Production from the Ungani Oilfield for the quarter totalled ~93,000 bbls (gross) at an average daily rate over the period of ~1,010 bopd (March quarter ~112,000 bbls at ~1,230 bopd). The September quarterly production was impacted by production downtime required to install the ESP (electric submersible pump) in Ungani 7.

The Ungani Oilfield is subject to a process of continuous improvement both for the surface production facilities and the downhole well configurations. This has the aim of continuous process improvement, maintenance of production, and optimisation of oil recovery. Recent activity has included upgrades to instrumentation and controls and the installation of an ESP in the Ungani 7 well. The ESP allows higher fluid rates than were possible with the beam pump that was initially installed.

The installation of the ESP with Buru's jacking platform was undertaken by Buru personnel in a cost effective manner, notwithstanding the fact that some issues were encountered with contractor supplied equipment that caused a number of delays to the project.

1

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

Buru Jacking Platform at Ungani 7

Ungani crude oil continues to be trucked to CGL storage Tank 10 at Wyndham Port prior to its FOB sale. With all currently configured wells online, excluding Ungani Far West 1, field production capacity is ~1,100 bopd.

Ungani Far West 1 Reeves Production Test

The Ungani Far West 1 well was drilled in late 2015/early 2016 to test an Ungani Dolomite target some 3.3 kilometers to the east of the Ungani Oilfield. The well was a discovery at the Ungani Dolomite level at some 2,400 metres depth and was completed for production from that level. The well also encountered a potential oil pool in a shallower sandstone horizon (Reeves Formation) at some 1,500 metres depth which was interpreted as a potential future producing horizon.

The well has now been recompleted to allow a production test of the Reeves zone. After removal of the existing completion with Buru's jacking platform the interval 1562.5m to 1565.5m over the interpreted Reeves oil zone was perforated and a single zone completion string was run into the well with the jacking platform. The well was then put on beam pump and after clean-up, the well was produced at up to 270 bopd with minimal water cuts, which was at the higher end of expectations. The well is currently shut-in for pressure buildup to gather further reservoir information.

The recovered oil is very similar in composition to Ungani crude and the well will be put onto longer term production once final confirmatory oil assays are completed in the coming weeks.

Further development of Ungani

The Ungani Joint Venture is currently undertaking technical and commercial analysis of the feasibility of further development well drilling on the Ungani Oilfield during the 2021 drilling season. Factors being considered include rig availability and suitability, bottom hole location

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Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

for the well, well design and associated long lead items, and the commercial drivers for additional wells at this stage of the field's development. It is anticipated a decision will be made on the program by the end of the year to allow adequate planning and approval time for a 2021 drilling program, if this is agreed by the Joint Venture.

Sales

Oil sales for the quarter totalled ~146,000 barrels (gross) from two liftings. The first lifting was completed on 16 July 2020 for a total of 74,819 bbls (gross - Buru's share 50%) and was sold by the Buru/Roc Oil Ungani Joint Venture on a spot basis. Consistent with sales under previous offtake agreements, the price received FOB Wyndham was the realised average dated Brent oil price for the loading month, less the buyer's fixed marine transport discount. Under these terms Buru's 50% revenue share from the lifting was ~A$1.6 million.

During the quarter, the Buru-ROC Joint Venture entered into a longer term marketing agreement with BP Singapore Pte Limited (BP) through to 30 June 2021 whereby BP market the Ungani crude by offtaking the crude from Wyndham Port on an FOB basis and on-selling the oil into market. The September lifting was the first lifting under this new marketing agreement and was completed on 26 September 2020 for a total of 71,038 bbls (gross - Buru's share 50%). Under the marketing contract, the price received will be the actual price BP sold the crude to the refinery (a fixed differential to the average dated Brent price for the month of October), less shipping and associated costs. Under these terms Buru's 50% revenue share from the lifting is currently estimated at ~A$1.6 million, with the price to be finalised at the end of October.

Ungani crude lifting at Wyndham in September by the Anichkov Bridge

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Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437

Exploration

Planning for the 2021 exploration program is currently underway. It will not be possible to undertake exploration drilling during the relatively short remaining time of the 2020 Canning Basin dry season due to a combination of COVID-19 restrictions, particularly in regard to movement in the Kimberley, and the lack of availability of suitable drilling rigs. However, intensive planning is underway for up to a three well drilling program commencing in the second quarter next year. There are a number of proposed exploration drilling sites that have the requisite approvals, and the Company has an extensive inventory of well equipment that could be utilised in the program.

The significant downturn in exploration activity also means that the lead times for equipment have significantly improved and no issue is expected with being able to obtain additional long lead items. The undertaking of the program will depend on a number of factors including the availability of rigs and suitable funding structures. The form of the program may also be influenced by the introduction of a partner subsequent to the completion of the current structured farmout process for the Company's exploration areas.

Additional technical work is being undertaken on the Company's prospect portfolio with a substantial seismic program planned for the 2021 dry season to assist with identifying targets for future drilling activity.

Additional work is also being undertaken to firm up a number of shallow exploration targets that could be drilled with a smaller more mobile drilling rig, and a feasibility and planning process for a shallow drilling program during the 2021 drilling season is underway.

Yulleroo Gasfield (EP 391 & EP 436 - Buru Energy 100%)

The Yulleroo Gasfield is a regionally significant gas accumulation with four wells defining the field of which one has been successfully fracture stimulated and two other completed wells are available for further testing and possible production.

To further the development of this substantial resource, the Company has been investigating the potential for both the establishment of an integrated solar and gas electricity project and for the supply of gas to local industry, including to the Sheffield Resources proposed mineral sands mine.

The Company will also be seeking clarification of the recent announcement by the Western Australian Government in relation to changes to the existing Domgas reservation policy and any potential effects that may have on future larger scale development of the Yulleroo Gasfield.

Blina Oilfield (L6 - Buru Energy 100%)

The Blina Oilfield remains shut-in while further technical evaluation is undertaken. Production testing and pressure data obtained in 2019 has indicated that there may be considerable conventional oil resources remaining in the field. Further activity to verify this will be undertaken at an appropriate time in the 2021 operational season.

Mineral Joint Venture

Buru has entered into a binding Heads of Agreement with Sipa Resources Limited (Sipa) for participation in two mineral exploration tenements in relation to joint exploration for hydrothermal lead/zinc deposits in the central Canning Basin.  To earn its 50% interest in

4

Level 2, 16 Ord St West Perth WA 6005

1800 337 330

[e-mail]

ABN 71 130 651 437