Buru Energy has received an extra US$200,000 in cash for its share of the recent sale of crude oil from its Ungani oil field in Western Australia’s Canning basin. Buru’s third oil sale for the year originally settled in mid-May at A$1.2m, net to Buru, however contractual terms saw the final price tag upped by USD $200k due to rising oil prices throughout the month of May.
This latest development rounds out a reasonably solid first half for Buru that was already sitting on a cash pot of $30 million at the end of the March quarter.
The Perth-based oil producer said its next planned export of crude oil via the Wyndham port was still on track for mid-July with the load sold two months ahead of delivery on a ‘spot basis’. The price received is calculated on the average Brent price for the month of July.
Buru management said it is planning to continue to sell its crude on a spot basis whilst it watches oil price movements ahead of any negotiations on another, longer-term sales arrangement.
Buru Executive Chairman, Eric Streitberg said: “We are very pleased and relieved to see the firming oil price that gives us a healthier return from our oil sales.”
“Our strong cash position and our high-quality exploration portfolio puts us in a good position to weather the current storms and it has also been very pleasing to see the share price improving.”
Buru said the Ungani oil field continues to produce at around 1,250 barrels of oil per day with fresh well production optimisation operations underway.
The company said preparations were well advanced to install an electric submersible pump in the Ungani-7 production well to increase the oil flow rate. Buru already has submersible pumps installed in the Ungani-1,ST1 and Ungani-2 production wells where they have proven to be reliable and effective.
Buru’s strong balance sheet has allowed it to ride out the Coronavirus and oil price storm and with A$30m in the bank, the company said it was now looking at possible acquisitions and corporate opportunities.
Elsewhere, Buru reported that it has seen strong interest in its farmout process with a number of companies now visiting its office in West Perth to review its historical exploration data.
Buru said that various parties are considering joining forces with it for the next Canning Basin exploration program across its portfolio of conventional oil prospects and world-class basin-centred gas resources.
Buru’s risk management strategy is to secure a new exploration joint venture partner to share the burden of costs around its next exploration drilling program and its track record as an actual producer should lend some weight to that strategy.
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By Matt Birney
