As part of its ongoing commercialisation strategy, Buru Energy (ASX: BRU) is readying to undertake a well test program for its Rafael gas condensate discovery in Western Australia’s Canning Basin, while, in parallel, advancing its energy transition assets.
The well test program at Rafael 1 will begin in the September quarter, with plans to use a coil tubing unit rather than a workover rig.
Buru says a coil tubing unit will be “more cost effective” and means it can be carried out without the need to introduce heavy brines into the well for control, and which could negatively impact formation flow capacity.
A coil tubing unit along with ancillary equipment are all expected to be available for use at Rafael in the September quarter.
This well test program will clean-up and evaluate the lower barefoot zone that was investigated in March.
The program will then perforate and clean-up and individually flow-test additional zones, including the main Ungani Dolomite reservoir and the Upper Laurel Dolomite.
Buru says the clean-up and testing of these zones could “materially increase the flow rates” compared to what was shown during the previous testing in March.
It is expected the entire operation will take about 25 days.
Buru executive chairman Eric Streitberg said the company was pleased its well testing program for Rafael is on track with a lower-cost and more efficient method planned.
“Given the zonal treatment and perforation program we are proposing, we believe that we should be able to materially increase the flow rates, based on our experience with similar reservoirs in our other wells with dolomitic reservoirs in the Canning Basin.”
“The commercialisation concept select activity for the Rafael gas discovery is also proceeding well with the help of our external consultants and building on our previous commercialisation activity.”
Potential increase in resource confidence
Consulting group ERCE Australia independently certified the Rafael discovery, with Buru announcing in April, the consultants had provided a resource for the Ungani Dolomite reservoir.
The reservoir was given gross 3C contingent resources of 1.02 trillion cubic feet of recoverable gas and 20.5 million barrels of condensate.
As part of the upcoming well test program, ERCE will review the results with the aim of increasing confidence in the recovery and deliverability in the Ungani Dolomite zone, along with the potential of the untested Upper Laurel Dolomite.
Buru noted a successful flow test in the Upper Laurel Dolomite would enable the resource to be upgraded from prospective to contingent.
The company is operator and owns 50% of the permit containing the Rafael discovery, with major Origin Energy (ASX: ORG) holding the other 50%.
Carbon capture and storage
Earlier this week, Buru inked a deal to farm-out 25% of its 50% interest in Block L20-1 in WA’s onshore Carnarvon Basin so it could focus on Rafael and advance its carbon capture and storage (CCS) research activities.
Mineral Resources’ (ASX: MIN) subsidiary Energy Resources (EnRes) agreed to up its stake to 75% in the block and assume the operator role in consideration for free-carrying Buru through an exploration program at the first two wells.
The Australian Government gave Buru a grant of up to $7 million to evaluate the CCS potential of the L20-1 field via a technical review and feasibility study.
As part of the deal with EnRes gaining a higher interest, it will contribute up to $7 million towards the CCS feasibility work.
Mr Streitberg said the coming months would be “very exciting” for Buru as the Rafael testing program kicks-off, and commercialisation and CCS research ramps up.
Energy transition assets
Buru’s CCS activities are part of its energy transition asset portfolio, with Mr Streitberg saying it plays a “key component” of any realisable path to net zero by 2050.
Mr Streitberg noted the company recognises the “shifting sentiment from fossil fuels”, while also acknowledging they will be part of the world’s energy mix for decades.
“The company’s active participation in the energy transition economy is vital to ensuring it remains relevant and commercially viable in the future,” he added.
In addition to CCS, Buru is evaluating natural hydrogen as a potential energy source through its subsidiary 2H Resources.
Meanwhile, Battmin is using Buru’s geological expertise to search for concealed lead-zinc deposits in the Canning Basin in joint venture with Sipa Resources (ASX: SRI).
Rights issue due to close
A rights issue to help fund Buru’s well testing program for Rafael 1 is due to close at the end of this month.
Eligible shareholders can purchase Buru shares at $0.16 each, on a one-for-six entitlement offer.
This represents a 24% discount to the company’s closing share price on the company’s last trading day prior to launching the offer.
Buru expects to raise up to $14.4 million before costs to fund its activities.