Buru Energy has received $1.9m cash for its share of the latest sale of crude oil from its Ungani oil field in Western Australia’s Canning basin. The sale rounds out a solid quarter of oil sales for Buru who previously predicted it would achieve $5.4m in oil sales for the March quarter – a prediction that is looking pretty good despite the recent drop in oil prices. Buru said it is able to weather the current oil price storm and can still make money at over US$25 per barrel.
Oil production at its Ungani oil field continues at about 1,500 barrels per day with all wells on production and all roads open. Whilst the oil price received for its latest oil sale was affected by the fall in global oil prices, the fall has been partially offset by the weakness of the Australian dollar.
The company said that operations at its Ungani-6H were underway with results expected in coming weeks after some early teething problems with the coiled tubing equipment. Management also said it is moving quickly to review and minimise operating costs and corporate overheads along with reducing discretionary expenditure where possible, in light of recent Coronavirus related events.
Buru said it has a strong balance sheet with $32.4m in cash reported in the last quarterly, no material non-discretionary commitments across its exploration and production permits and it remains profitable in terms of its oil sales.
Buru Executive Chairman, Eric Streitberg said:
“On behalf of the Board I would like to assure shareholders that all necessary steps are being taken to ensure that the Company maintains the strength of its balance sheet to the extent possible, and maintains a safe and environmentally responsible operation through what is an unprecedented “double whammy” of an oil price war on top of a global pandemic and a consequent large scale market correction. The Company is in a strong position in its segment of the market and will be well placed to add value when the recovery commences.”
Buru looks to be in a relatively healthy position to weather the current global financial market storm and oil price war. Ungani-6H is also likely to add to its cash flow during the next quarter if the current operations are completed successfully.
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