Buru Energy spuds well, targets additional oil production

Buru Energy (ASX: BRU) has spudded its 100%-owned Ungani 4 development well in Western Australia’s Canning Basin, as part of its strategy to target additional production at its Ungani Oilfield.

The well is expected to take 34 days to drill to its planned 2,200m depth and is 500m from Buru Energy’s Ungani 1 well.

Buru Energy’s current production rate in the Ungani Oilfield is 1,250 barrels of oil per day (bopd) and, once producing, Ungani 4 has been forecast to boost this figure to 2,250bopd.

Following completion of Ungani 4, Buru Energy plans to spud Ungani 5 during November and December. If successful, Ungani 5 is anticipated to lift the company’s Ungani Oilfield production to its 3,000bopd target.

“We are delighted to be commencing this well as it gives us a path to substantially increase the production rate and value of the Ungani Oilfield if it is successful,” Buru Energy executive chairman Eric Streitberg said.

Ungani 4 is part of Buru Energy’s 100%-owned production licence L20 in the Canning Basin.

According to the company, it holds the largest acreage of any oil and gas explorers in the basin. As well as this, Buru Energy operates all of its exploration permits.

Further exploration is planned at the licence area, with Buru Energy hoping to achieve a 50% interest to its resource base.

Currently, the company trucks its oil to Wyndham Port where it is exported to South East Asian refineries. If the 3,000bopd production and resource targets are met, Buru Energy plans to develop an export facility at Broom.

At the 1,250bopd production rate, Buru Energy is achieving an operating margin of about A$30 per barrel sold.

Shares in Buru Energy were up almost 5% in early afternoon trade.