Buru Energy Limited (ASX:BRU) has revealed total cumulative production of 959,000 barrels as of 7 August from the Ungani oilfield, with the production of the millionth barrel expected later in August.
Ungani is an onshore oil field in the Canning Basin, about 100 kilometres east of Broome in the Kimberly region of Western Australia.
The next lifting of oil from Tank 10 in Wyndham by Trafigura is expected to be in mid-August, with expected lifting volumes of some 50,000 barrels gross (Buru’s share 50%).
Meanwhile, production optimisation and balancing activities continue with adjustment of the beam pump operation on Ungani 4 and tests on the various wells.
Ungani 5 production has declined as predicted prior to the installation of artificial lift, and Ungani 4 oil rates have declined at a higher rate than expected, which is interpreted to be due to significant reservoir damage as part of the sub-optimal drilling and completion of that well.
The joint venture has now agreed to undertake a side-track of the well as the first operation with the DDGT1 rig.
Total field production with the wells in their present configuration is currently some 1,400 barrels of oil per day (bopd) with ongoing work to ensure production is increased to target levels.
The applications for regulatory approval for the start of production from the Ungani Far West 1 well are currently being processed and are expected to be received shortly.
The target date for production commencement from the well is the end of August.
The 2018 rig operations program is planned to commence in late August/early September with work underway in the field on the preparation of the DDGT1 rig for this program and on the sourcing of long lead drilling items, all of which are proceeding on schedule.
Roc Oil transaction
In May 2018, Buru entered into a transaction to sell 50% of the Ungani Field to Roc Oil (Canning) Pty Limited.
Under the terms of the agreement, Buru received $13 million of the purchase price immediately with the remaining $51 million of the purchase price payable upon the approval and registration of the Ungani production licence transfers.
This registration process is the responsibility of Roc and is being progressed as expeditiously as possible.
Buru is well funded with about $20 million in cash as of 30 June 2018 prior to the receipt of the remaining funds from Roc.