Ebenezer3
11 months ago
Excerpt from another article: company says reservoir pressures at Rafael 1 suggest it may be charged with a column of up to 700m, which is generally coincident with structural closure mapped on existing 2D seismic data. Some reservoir pressures suggest a column of up to 900m.
The 3C resource is constrained by a column height of 634m, which is the mapped structural closure of the Rafael accumulation visible on 2D seismic data.
To address the column height – and in turn, volume uncertainty – at Rafael, Buru plans to shoot and interpret a new 3D seismic survey scheduled for this year’s third quarter, along with appraisal drilling next year.
The company believes that as part of the long-term power strategy for the Kimberley, the current 1P contingent resource for Rafael alone could be sufficient enough to provide a lower-emissions solution for the existing power generation systems that are currently serviced by trucked LNG sourced from offshore fields on the North West Shelf.
Buru Energy chief executive officer Thomas Nador said: “We are delivering on our multi-pronged strategy to develop Rafael, and this approval by DMIRS of the Declaration of Location for the discovery is a key step along the path to commercialise this potentially significant resource. With full ownership of the Rafael discovery, we are focused on de-risking the resource through good planning and execution discipline, and by doing so, creating shareholder value.”
The appraisal program next year will allow Buru to assess commercial opportunities through its increased resource confidence. Its resource estimates will this month undergo an internal assurance and approval process in a bid to define the project’s financial metrics.
With its 100 per cent interest in Rafael and 50 per cent operating interest in the nearby Ungani oilfield, Buru has taken an aggressive position in the onshore Canning Basin and continues to be an active explorer.
The company now holds a net 22,500 square kilometres in the basin, making it the dominant net-acreage holder and operator.
ASX punters reacted positively to Buru's latest news, with the company's stock jumping more than 29 per cent in today's trading, rising to a high of 11 cents at market closure from Monday's closing price of 0.085c.
https://www.businessnews.com.au/article/Buru-Energy-charges-ahead-with-Canning-Basin-gas#amp_tf=From%20%251%24s&aoh=16884748137729&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fwww.businessnews.com.au%2Farticle%2FBuru-Energy-charges-ahead-with-Canning-Basin-gas
Ebenezer3
11 months ago
Buru Energy secures Declaration of Location application approval for Rafael gas and condensate discovery
Buru Energy secures Declaration of Location application approval for Rafael gas and condensate discovery
Proactive Investors
Published Jul 04, 2023 10:42
Updated Jul 04, 2023 11:00
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Buru Energy secures Declaration of Location application approval for Rafael gas and condensate discovery
The Western Australian Government has given the thumbs up to the Declaration of Location application by Buru Energy Ltd (ASX:BRU, OTC:BRNGF) for the Rafael gas and condensate discovery, an approval that brings it a step closer to development.
Discovered in 2021, Rafael is considered a regionally significant conventional gas and condensate resource, independently assessed to potentially hold more than one trillion cubic feet of gas and 20 million barrels of condensate.
A March 2022 flow test affirmed the quality of gas with low reservoir CO2 and a high condensate (light oil) content of 40 barrels per million cubic feet of gas from the Ungani Dolomite equivalent reservoir.
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This approval opens the door for Buru to apply for a Production Licence or Retention Lease within the next two years - a term that could be extended to four years at the discretion of the Minister for Mines and Petroleum.
“Good planning and execution discipline”
“We are delivering on our multi-pronged strategy to develop Rafael and this approval by DMIRS of the Declaration of Location for the discovery is a key step along the path to commercialise this potentially significant resource,” Buru Energy CEO Thomas Nador said.
“With full ownership of the Rafael discovery, we are focused on de-risking the resource through good planning and execution discipline, and by doing so, creating shareholder value.”
Buru believes the Rafael discovery “has the potential to transform the energy system of the Kimberley and significantly add to Western Australia’s resource development”.
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The company is advancing the development of Rafael in a structured process, preparing for a 3D seismic survey over the Rafael geological structures in the third quarter of this year to be followed up by appraisal drilling in 2024.
On the engineering side of things, Buru is undertaking internal assurance on third-party engineering studies that will inform development concept selection and monetisation options for the project.
The company says this preliminary work will accelerate Front End Engineering and Design (FEED) following resource appraisal, and reduce cycle time to Final Investment Decision (FID) for the development.
Read more on Proactive Investors AU
Ebenezer3
12 months ago
Proactive article with excerpts from MST report:
UK
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Buru Energy receives A$0.40 valuation in MST Access’ initiation report; says Rafael well a “gamechanger”
04:10 Thu 08 Jun 2023
Ephrem Joseph
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Buru Energy Ltd
ASX:BRU
OTC:BRNGF
Buru Energy Ltd -
Buru Energy Ltd (ASX:BRU, OTC:BRNGF) has received a share price valuation of A$0.40 for its core exploration and production assets in an initiation report compiled by MST Access, the research platform of MST Financial.
MST’s valuation is spearheaded by the company’s ‘transformational’ Rafael gas discovery, which when added to its new ventures and free-carried exploration generates an unrisked upside of around A$1.62/per share.
On the green front, the company’s new ventures in carbon capture and storage (CCS) and hydrogen have opened up low-carbon opportunities.
Looking ahead, Buru is well funded with A$14 million in cash and no debt, poised to execute its growth plan across its various oil and gas operations in WA’s Canning and Carnarvon Basins.
Following are excerpts from MST Access’ initiation report:
Investment thesis
The Rafael conventional condensate-rich, low CO2 gas discovery justifies a significant re-rating.
The resource has been independently assessed at 260 Bcf (2C) and up to 1Tcf of gas and 20 million barrels of condensate at the 3C level.
The share price discounts the value of in-situ resources and gives no value to commercial potential, in our view.
GeoVault and 2H Resources' new ventures differentiate Buru from peers and would have significant value as standalone entities.
We expect these initiatives will gain momentum in a de-carbonising world in time.
There is significant commercial and technical work to fully exploit Rafael, and other exploration activities planned in 2024, but Buru has extensive in-house capability to manage what could become a very large and valuable enterprise.
Valuation: Core value A$0.40. Un-risked upside A$1.62
MST’s valuation method is a combination of a risked DCF of a Rafael gas project and equity market peers active in natural hydrogen, CCS and exploration.
We value the core E&P assets at A$0.40, with Rafael risked due to its predevelopment status.
Major de-risking milestones and the value implications are documented in this report and lead to an un-risked upside of A$1.62.
Ebenezer3
1 year ago
Australia's gas industry will take the lead to a net zero 2050
We are "not a passive observer, or casualty" on path to decarbonisation: APPEA chair
16 May 2023 2:16 GMT UPDATED 16 May 2023 2:16 GMT
By Amanda Battersby in Adelaide
Australia’s oil and gas industry must not become a casualty in the nation’s and the global race to decarbonisation, said APPEA chair Meg O’Neill.
Northern Territory gas exploitation: ‘Best outcome’ or ‘rotten decision’? You decide
Read more
“This week, we double down on our message that the oil and gas industry is not a passive observer, or worse — a casualty — of the global and Australian race towards a net zero economy, O’Neill said in a keynote address to the APPEA 2023 conference.
“We are part of the solution. We are an essential source of energy for every business… every household… every community… every person.
“And we are committed to working together to achieve the Paris targets,” she said.
The Australian Petroleum Production and Exploration Association (APPEA) sees gas as playing an important role on that road to net zero.
“When used to generate electricity, natural gas emits around half the lifecycle emissions of coal. That’s a pretty strong argument for using more gas in my book,” said O’Neill.
But investments in the new gas supply needed both for the domestic market and for export, require a regulatory framework that provides stability and transparency, she told delegates.
“Australia is uniquely placed to succeed in the energy transition — we have plenty of natural resources, the right workforce and a strategic location,” said O’Neill.
“I am confident the Albanese government wants the same outcome, and our industry will continue to work constructively and proactively on charting Australia’s reliable, affordable lower carbon future.”
Gas is crucial for Australia’s energy security, particularly when solar and wind power are compromised by the weather, and is also critical for energy security in nations such as Japan and South Korea that rely on liquefied natural gas imports from Down Under.
“Nations across the Indo-Pacific still rely on Australian gas to ensure their own energy security today and support their clean energy transformations, with higher penetration of renewables. Japan, South Korea, Singapore and China have been our most important LNG trading partners for years,” said Minister for Resources, Madeleine King.
Australia is one of the world’s largest LNG exporters, accounting for about 21% of global exports, with export revenues forecast to reach A$91 billion (US61 billion) in the current financial year.
Australia is by far the largest LNG supplier to Japan, accounting for almost half of its LNG imports in 2022, worth an estimated A$34 billion.
Australia’s gas supplies to South Korea and China last year were worth an estimated A$18 billion and A$19 billion, respectively.
Japanese and South Korean demand, and their significant capital investment, has underpinned development of Australia’s LNG industry, on both its east and west coasts, added King.
O’Neill noted that gas accounts for 42% of the energy used by Australian manufacturers.
“We know… that the Australian Government wants to turbocharge our manufacturing capabilities. Using more gas could do this.”
O’Neill also highlighted that gas can fuel the plants that manufacture batteries for electric vehicles.
Australia’s Prime Minister Anthony Albanese last week said that gas is an important industry for Australia and for its national interest.
“But we know some in the parliament, and many in the community, do not know the central role natural gas plays in the Australian economy and their everyday lives,” said O’Neill.
“Or the vital role natural gas is playing and will continue to play, in reducing Australia’s emissions.
“This is an area where our industry recognises we need to do more.”
APPEA is embarking on an awareness campaign, highlighting that its focus on the industry’s contribution to Australia’s economy and to emissions reductions, is not a policy pivot, or reset.
“Rather, it reflects our strengthened resolve to be more forward leaning about our sector’s strong future and critical role in the net zero economy… in Australia, in our region and globally.
“Many companies have set their own ambitious targets to achieve net zero and plan to invest billions of dollars in the technologies that will deliver the real emissions reductions needed to get us there,” said O’Neill.
“In short, we will lead, we will shape, and we will innovate towards 2050 and a net zero emissions Australia.”
Ebenezer3
1 year ago
Ungani field production restarted...
Buru Energy flips the switch on production at Ungani Oilfield
19:39 Sun 14 May 2023
Elisha Newell
Buru Energy Ltd
ASX:BRU
OTC:BRNGF
Buru Energy Ltd - Buru Energy flips the switch on production at Ungani Oilfield
A production restart at the Ungani Oilfield in Western Australia is cause for celebration for ASX-lister Buru Energy Ltd (ASX:BRU, OTC:BRNGF).
The production hub has kicked back into gear after a major export road was shuttered in the wake of ex-Tropical Cyclone Ellie back in January.
Since then, Main Roads WA has crafted a low-level Fitzroy River crossing that’s suitable for heavy vehicles, meaning Buru has begun clearing the existing oil inventory at the Ungani Production Facility.
Subsequently, the energy stock is back in action at the WA asset, with initial oil production rates similar to pre shut-in rates of between 500 and 600 barrels of oil per day.
The next oil lifting from Wyndham Port — destined for the Southeast Asian market — is scheduled for Q3 2023.
Kimberley rebuilds
Buru CEO Thomas Nador said the team was eager to restart production following the extraordinary weather event earlier this year.
“Since 2015, the Ungani operation has been an important regional employer and contributor to the local economy through direct and indirect employment, procurement, community support and royalties.
“As such, the restart of production is being welcomed by many, including our staff, shareholders, supply chain partners, the local community and the government.
“I would like to thank them for their support and perseverance during what has been a difficult time for the communities in the Kimberley.”
Ebenezer3
1 year ago
Australian Budget Supports Gas and Hydrogen Development
Wednesday, May 10, 2023
© Lukasz Z / Adobe Stock
Australia’s federal government has released its 2023 Budget, with the offshore industry saying it listened to industry concerns.
Australian Petroleum Production & Exploration Association (APPEA) Chief Executive Samantha McCulloch said the new Future Gas Strategy showed the government recognised the urgent need for a strategy to secure new gas supply to avoid shortfalls in coming years.
“New gas supply is essential to keep the lights on, put downward pressure on prices and deliver substantial economic benefits in the transformation of our energy system for net zero,” McCulloch said. “The national strategy announced tonight is a response to independent reports and authorities warning of gas supply shortfalls and allows for a coordinated policy response.”
The Budget allocates A$2 billion to accelerate the development of low-carbon hydrogen in Australia and to catalyse clean energy industries. Australia already has the largest pipeline of renewable hydrogen projects in the world.
McCulloch said: “Low-carbon hydrogen has a critical role to play in reaching net zero, in particular in hard-to-abate industries and manufacturing. The oil and gas sector is pivotal in scaling up and rolling out low-carbon hydrogen in Australia and globally, with natural gas combined with carbon capture representing the most developed and lowest cost pathway to low-carbon hydrogen available today.”
The Budget also recognised the importance of CCUS, with a review of regulations to enable CCUS investment – as highlighted by APPEA in its 2023-24 Federal Budget Submission. However, the McCulloch says the Budget fell short of committing to a national CCUS roadmap in partnership with industry to provide the clear policy direction needed to promote Australia as a regional carbon storage leader. “Global momentum for CCUS is growing, and Australia must not miss the emissions reduction and economic opportunity of an emerging CCUS industry that creates new jobs and investment.”
APPEA also welcomed the review of environmental management regulations for offshore energy to provide clarity for major supply projects.
Ebenezer3
1 year ago
Words of wisdom: Woodside Energy chief executive Meg O'Neill. Photo: APPEA
Woodside chief blasts extremists that threaten investment in Australia’s gas industry
Meg O’Neill also urges investment and regulatory certainty amid twin goals of energy security and decarbonisation
23 April 2023 7:14 GMT UPDATED 23 April 2023 7:14 GMT
By Amanda Battersby in Singapore
Woodside Energy chief executive Meg O’Neill has slammed extremists who are doing the damnedest to scupper under development and new gas projects in Australia, the region’s largest liquefied natural gas exporter.
Addressing the National Press Club in Canberra, O’Neill said that development of Australia’s gas industry has only been possible with the support of international investors and customers looking to secure their own energy supplies. But now they are questioning whether Australia still wants their investment.
“A vocal minority wants to shut down the industry and the jobs and livelihoods that go with it. They have deep pockets and are using both protest action and the courts to create uncertainty and destabilise regulatory processes to frustrate existing and new projects,” she said.
“We respect every Australian’s right to express their opinion – and we share the commitment to decarbonisation - but extremism is not the answer. We need confidence in stable regulatory outcomes, or we risk choking our energy industry, impacting both domestic and international supply,” added O’Neill.
“This concerns our regional partners, who depend on current Australian gas projects to help them meet their decarbonisation commitments and to keep the lights on in Asian megacities.”
O’Neill said that the challenge, as she sees it, is for Australia to use its vast natural gas resources for three interrelated goals: To provide affordable and reliable energy for Australians, to maintain strategic partnerships and regional energy security, and to progress global decarbonisation.
“We want to develop new projects in Australia, across both hydrocarbons and new energy opportunities, but that will only be possible if policy settings provide the certainty to underpin long-term investment.”
Securing future investment
During 2022, the world experienced what the International Energy Agency has termed “the first truly global energy crisis” and Australia, for all its vast natural resources, was not immune.
“Those who can least afford it have felt it most acutely, sometimes having to choose between food and heating through winter. This should not be happening in Australia. Australians should be able to expect reliable energy. That needs to come from having the right investment climate - rather than arbitrary market intervention - and the right honest conversations between all participants in the energy system,” said O’Neill.
But, she said, a longer-term view is needed to ensure new supply will be there to meet anticipated demand.
“Woodside and other companies are actively considering what we might be able to do to help - from infrastructure to enable LNG imports, to buildout of gas storage - but we also know these can only be progressed in concert with government.
“[This] requires a clear investment framework and regulatory certainty to attract the capital from international markets that is needed for large-scale projects.”
Woodside's 2022 A$2 billion-plus tax bill
Read more
The same partners who invested in Australia’s gas projects can provide the capital to develop lower-carbon hydrogen and renewable projects, but only if they consider it a secure investment, added O’Neill.
“For Australia to remain an attractive destination for global capital, fiscal and regulatory certainty is paramount.
“We urge the government, in any changes to the tax framework, to consider the long-term and preserve Australia’s ability to attract the next generation of investment, jobs and energy supply,” said O’Neill.
“In terms of regulatory certainty, agreement on clear processes and response times for project approvals is essential to unlocking reliable supply. Otherwise, energy investment will find another home, taking jobs and opportunities with it.”
Gas in tandem with renewables
Globally, we are going to need to use all the tools to address climate change while advancing developing economies, Woodside’s chief executive said.
“That’s going to require rapid scale-up of renewables and investment in ongoing gas supply as existing gas fields deplete.”
Even in its Net Zero Emissions scenario, the Paris-headquartered IEA has estimated an average of US$365 billion of upstream oil and gas investment is needed every year to 2030, and US$171 billion every year thereafter to 2050.
“When used to generate electricity, natural gas emits around half the life cycle emissions of coal. Gas is a flexible source of energy and provides a stable baseload,” she added.
Australia’s federal government is targeting increasing the share of renewables in the electricity grid to 82% by 2030, leaving an 18% gap that could be filled by natural gas. However, today gas-fired power only accounts for 7% of the national energy market.
O’Neill admitted that Australia’s gas industry needs to do more to reduce emissions but that it is moving in the right direction.
“We employ engineers – creative, practical problem-solvers, who are prioritising this challenge – and commercial analysts, who are figuring out ways to finance it,” she said.
“We have geologists, who used to explore for new oil and gas reservoirs, who are now looking at how we can safely inject and store carbon dioxide in depleted reservoirs.”
However, in the absence of certainty at a national level, Australian states have implemented complex and conflicting regulations for emissions reduction, moving away from the concept of tackling the lowest-cost abatement options first, and adding to the cost of doing business… not just for energy producers, but for all industrial segments, O’Neill commented.
Getting it right in future
“You might guess from my name that I’m of Irish heritage. I grew up in Boulder, Colorado, (in the US) but my Nanna grew up in a village in County Mayo, in Western Ireland, with no electricity - relying on a peat fire for heating, cooking and light,” O’Neill shared.
“As a society, we have come a long way since then, in just two generations. And we should not be regressing. We should instead be extending access to electricity to hundreds of millions of people in the developing world who still live without it. To do that, we need new supplies of affordable and reliable energy.”
However, against that backdrop, there is the need to decarbonise which will require the rapid scale-up of renewables alongside investment in ongoing gas supply as existing gas fields deplete.
Woodside is aiming to spend US$5 billion by 2030 to progress new energy opportunities and lower-carbon services.
Admitting the Australian company – which was founded in 1954 – historically has not always “got it right” in its relations with First Nations peoples, O’Neill said the company is on a journey in its relations with First Nations peoples and “working to get it right” by listening to and learning from these peoples.
“For Woodside, a big part of this is working with the Traditional Owners of Murujuga, in northern Western Australia, where our largest Australian operations are based,” she said
Ebenezer3
1 year ago
Buru Energy pursues partnership model to assess commercialisation pathway for Rafael
09:45 Tue 18 Apr 2023
Susanna Nelson
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Buru Energy Ltd
ASX:BRU
OTC:BRNGF
Buru Energy -
Flow test underway at Rafael.
Buru Energy Ltd (ASX:BRU, OTC:BRNGF) has wrapped up a pre-feasibility study (PFS) for a Kimberley-based floating liquified natural gas (FLNG) plant solution with Transborders Energy.
Technically and economically feasible
This PFS forms part of the company’s continuing efforts to identify the most value-accretive development of its potentially large-scale 100% Buru-owned Rafael gas and condensate resource in the Canning Basin.
The company is pleased with the results – the PFS, conducted in collaboration with Transborders Energy and Technip (OTC:TNHPF) Energies, demonstrates such a facility would be a technically, commercially and economically feasible option to commercialise Rafael.
This view is based on independently assessed potential recoverable volumes of more than one TCF (trillion cubic feet) of gas and more than 20 million barrels of condensate.
The study confirmed that a compact, regionally located, roughly 1.6 million tonnes per annum (MTPA) FLNG facility, in conjunction with onshore condensate and LPG processing, is an economically robust path for development of the Rafael 3C resource.
It could also offer a relatively lower cost and shorter time frame to development than alternative gas export options.
Commercialisation pathway
“Following on from Buru’s acquisition of Origin Energy’s Canning Basin Joint Venture interests announced less than two months ago that gave it 100% ownership of the regionally significant Rafael resource, the completion of this study is a significant step forward in the commercialisation pathway for Rafael,” CEO Thomas Nador said.
Buru will continue to work with Transborders and its multi-project collaboration partners, which include Kyushu Electric Power, Mitsui O.S.K. Lines, Technip Energies, SBM Offshore and Add Energy (part of ABL Group ASA), to progress commercial discussions and to refine the cost and schedule parameters for the next phase of project definition.
Alongside the Transborders study, Buru is exploring a number of other pathways for the early commercialisation of a full range of Rafael resource sizes, including local LNG production for Kimberley energy requirements, and local value-adding gas conversion to products including methanol, ammonia and urea.
Buru Energy has also identified the potential for these developments to benefit from carbon capture and storage (CCS) solutions being developed by Buru’s Geovault subsidiary.
Conducting these studies in parallel with the ongoing appraisal of the Rafael resource will ensure a faster transition to front end engineering and design (FEED) following appraisal drilling in 2024, and a reduced delivery timeframe to first product sales from this potentially regionally significant project.
Partnership model
“The value of this study extends beyond affirming technical and economic feasibility for an FLNG option for the 3C volumes of the Rafael resource – it is a potential solution and partnership model that integrates the full LNG value chain via highly credible energy industry participants from LNG buyers, shippers, project delivery specialists and investors all working together to bring gas resource developments like Rafael to reality,” Nador continued.
“In combination with onshore condensate and LPG processing, the development concept is compelling, and work will continue to further refine the concept and progress commercial discussions.
“In addition to the work on FLNG, Buru is also examining and screening other development options that cater for various Rafael resource volume scenarios to ensure the company can move expeditiously on a selected concept once appraisal outcomes are confirmed.
"These include local Kimberley-based power generation, smaller-scale LNG production, downstream petrochemical processing projects and the potential to process Rafael gas for LNG export via the North West Shelf facilities.
“This work will ensure that there is a commercially attractive monetisation pathway for Rafael gas and condensate across the full range of contingent resource volumes.
“In parallel with this commercialisation study work, Buru is on track to acquire the Rafael 3D seismic survey during this year’s operating season and is targeting appraisal drilling in 2024 to fully inform the development concept selection for Rafael.”
Ebenezer3
1 year ago
General NR Proactive:
Buru Energy sees progress across its portfolio of core and new energy businesses
13:29 Fri 14 Apr 2023
Proactive
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Buru Energy Ltd
ASX:BRU
OTC:BRNGF
Buru Energy Ltd - Buru Energy gears up for extensive exploration program across the Canning Basin
About the company
Buru Energy Ltd (ASX:BRU) is an oil and gas exploration and production company focused on exploring and developing petroleum resources of the Canning Basin in the southwest of Western Australia’s Kimberley region.
The company has a 50% operating interest in the producing Ungani Oilfield and holds interests in an extensive portfolio of petroleum exploration permits covering about 5.4 million gross acres in the Canning Basin.
Buru is the operator of all of its exploration permits, and also has the largest acreage in the Canning Basin.
How it is doing
06 Apr 2023
In an important step down the path toward a full production licence, Buru Energy Ltd (ASX:BRU) has submitted a declaration of location application for the Rafael 1 gas and condensate discovery in the Canning Basin EP 428 permit area.
The application, submitted to the WA Department of Mines, Industry Regulation and Safety (DMIRS), has nominated two blocks covering an area of about 160 square kilometres within Buru’s 100% owned exploration permit EP 428.
Following the approval of the declaration of location by DMIRS, Buru has up to two years to apply for a Production Licence or Retention Lease, a period which may be extended to four years at the discretion of the Minister.
“Following the announcement in February 2023 of Buru’s acquisition of Origin Energy’s Canning Basin Joint Venture interests, Buru now holds a 100% interest in EP 428 and the high potential, high quality, liquids-rich Rafael conventional gas discovery,” Buru Energy CEO Thomas Nador said
Ebenezer3
1 year ago
Buru ignites pathway to production at WA’s Canning Basin
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Mark Irving
By Mark Irving
Wednesday, 5 April, 2023 - 11:37
Buru Energy is forging ahead in its bid to unlock the massive potential of its Rafael 1 well, east of Broome in WA’s Canning Basin, by taking another important step on its pathway to production.
The company has lodged a declaration of location application with the State Government regulator in a move it describes as a key step towards the monetisation of its resource. It represents the next step in the paper trail for the company to obtain a production licence (PL) and also reinforces management’s strong confidence in the potential of its project.
Rafael 1’s condensate-rich conventional gas accumulation was last year independently assessed to have the potential to hold recoverable volumes of an estimated one trillion cubic feet of gas and more than 20 million barrels of condensate or light oil. Buru’s application nominates two graticular blocks that cover an area of about 160 square kilometres within its wholly-owned exploration permit, EP 428.
Assuming approval is granted by the Department of Mines, Industry Regulation and Safety (DMIRS), Buru then has up to two years to apply for a PL or retention lease, or four years at ministerial discretion.
Management says it wants a “structured appraisal” of Rafael 1 and has begun planning and contractor engagement for a 3D seismic survey this year, with appraisal drilling to begin next year, to create the next steps to certification of resources.
However, Buru has also stated it wants to move quickly to crystallise the value Rafael 1 represents for the company’s shareholders.
The well was drilled in late 2021 and a successful flow test the next March was followed by the lodgement of a discovery assessment report to DMIRS another two months later.
Rafael 1 became a wholly-owned Buru asset when energy giant Origin Energy announced last year that it was pulling out of upstream oil and gas exploration activities. Origin then began divesting itself of these interests, including its share of joint venture interests with Buru.
The terms of the disinvestment saw Origin hand its 50 per cent interest in five exploration permits to Buru subsidiary, Buru Canning. Origin also agreed to pay Buru up to $4 million to fund Rafael 1’s seismic survey. In return, Buru was to make no upfront payments to Origin, but future payments of up to $34 million would be triggered should the Rafael project hit specified production milestones.
Buru was no doubt shocked that its partner was walking away from Rafael, especially considering gas is seen as an in-vogue transitional energy source as the world moves from carbon to non-carbon energy, and an energy source that is currently commanding high prices, thanks in no small part to the Russian invasion of Ukraine.
Whatever its dismay, the company has moved assuredly to emphasise the positives of its new position as the only stakeholder in the Rafael 1 asset, with no “overhang” and in charge of its own destiny. The autonomy gained through the deal struck with Origin allows Buru to aggressively pursue the Rafael development, says its chief executive officer Thomas Nador.
Buru also stresses Rafael has the potential to be a low-impact and low-emission source of natural gas, with a low-impact environmental footprint that will provide significant benefits to the local community and to Western Australia as a whole.
As management pushes ahead with its goal of bringing Rafael 1 on-stream, the market will be keenly watching to see if other resource companies would like a share of the action – and maybe take Origin’s place in a JV
Ebenezer3
1 year ago
Commenting on the transaction, Chair of Buru Energy, Mr Eric Streitberg said:
'The original farmin agreement with Origin provided the funding and the impetus that resulted in the Rafael discovery that has now assumed even more significance given the current focus on the West Australian and international gas markets.
Although we were very disappointed with Origin’s change of investment focus and the subsequent delays to our operations, this transaction has provided us with a unique opportunity to now reset the development and appraisal process, and most importantly the commercialisation and monetisation strategy for the Rafael discovery.
We now have control over a gas and condensate resource that is potentially unique in Western Australia and look forward to moving quickly to crystallise the value this represents for our shareholders.'
Commenting further, CEO Thomas Nador said:
'Since Origin’s decision in June last year to not support the proposed 2022 Canning Basin field work program, and then its September announcement that it intends to exit upstream exploration on strategic grounds, Buru has worked relentlessly to minimise the impact of this decision on its Canning Basin assets, and to maintain momentum for the appraisal and commercialisation of its flagship Rafael conventional gas and condensate development.
We are delighted to now be in the position to be back on ground this year to acquire the critical 3D seismic data over Rafael in support of appraisal drilling next year. We will also be finishing our assessment of the extensive seismic data acquired under the Origin farmin program that has already provided valuable insights into regional prospectivity and new play types in the Basin.
This agreement also provides Buru with strategic optionality to extract the highest value for our shareholders from our dominant position in the Canning Basin including not only the extensive hydrocarbon resources, but also the potential carbon capture and storage and natural hydrogen resources being developed through our GeoVault and 2H Resources subsidiaries.
The structure of the deal reflects Origin’s belief in the Rafael discovery, insofar as any future capped reimbursements to Origin are directly linked to future high value development and production milestones for Rafael gas.'
Ebenezer3
1 year ago
Transaction Summary
Under the terms of the transaction as reflected in a withdrawal agreement executed between Origin, Buru and Buru Canning, Buru Canning, as a wholly owned subsidiary of Buru, will receive Origin’s 50% participating interest in exploration permits EP 428 (containing the Rafael-1 conventional gas and condensate discovery), EP 129, EP 391, EP 431 and EP 436 with Buru and Buru Canning becoming the collective 100% owners of these permits. Separately, Origin has agreed to withdraw from the EP 457 and EP 458 joint ventures and assign its interests back to the Buru/Rey joint venture as described further below.
The Agreement includes a contribution of up to $4 million by Origin to undertake the Rafael 3D seismic survey program which is now planned to be conducted in the 2023 operating season. This survey will provide the highest value of information to support the structured appraisal of the Rafael discovery and will be critical to realising the highest value for any potential future transactions on the asset.
Under the terms of the Agreement, Buru will provide to Origin future capped staged contingent reimbursement payments of up to a total $34 million, conditional on the achievement of key Rafael discovery related development and production milestones. These contingent payments reflect certain past costs and costs related to this transaction as incurred by Origin.
As part of the Agreement, Origin will be released from any residual farmin and rehabilitation liabilities and costs associated with these Canning Basin exploration permits.
Origin’s 40% interest in EP 457 and EP 458 it shares with Buru and Rey will be assigned back to Buru and Rey equally in accordance with their pre-farmin equities, in consideration for releasing Origin from its residual farmin and rehabilitation liabilities associated with the Celestine 2D seismic survey carried out in 2021. Buru will remain Operator of these permits with a participating interest of 60%, with Rey holding the remaining 40%.
The transaction and assignment of Origin’s interests as set out above remains subject to regulatory approvals following the lodgment of the Agreement and instruments of transfer in respect of the Permits with the Department of Mines, Industry Regulation and Safety (DMIRS). The effective date in relation to joint venture costs is the date these documents are lodged with DMIRS.
Ebenezer3
1 year ago
Background
In December 2020, Origin agreed to farm into seven Canning Basin exploration permits held by Buru and Rey, to earn interests ranging from 40% to 50%. Buru remained Operator of the permits with working interests across the Basin ranging from 40% to 100%. The terms of the farmins required Origin to majority fund a two-well drilling program and the acquisition of a regional scale seismic program.
The second well in the program, Rafael 1, drilled in late 2021, was a large-scale conventional gas and condensate discovery, with an independent expert report subsequently confirming that Rafael has the potential to hold recoverable resources of over one TCF (trillion cubic feet) of high-quality gas and over 20 million barrels of condensate (light oil).
In June 2022, Origin informed Buru that it didn’t approve the funding for a proposed 3D seismic survey over the Rafael discovery. On 19 September 2022, Origin announced its intention to exit upstream exploration activities over time, including its joint venture interests with Buru in the Canning Basin, providing the flexibility to allocate capital towards its strategic priorities. Origin’s intention to exit introduced uncertainty to the timing and form of the forward appraisal and commercialisation of Rafael and added significant impetus to resolve matters.
Since the exit was announced both parties have worked to resolve matters and find agreement on commercial outcomes, including Buru proposing independent operations. Subsequent negotiations have resulted in an agreement for Origin to exit its interests and for Buru to resume control and up to 100% ownership of the permits, protecting and enhancing the long-term strategic value of the Company’s assets in the Canning Basin.
Ebenezer3
1 year ago
Australia: Buru to acquire Origin’s Canning Basin Joint Venture interests
15 Mar 2023
Highlights
Origin Energy, via its wholly owned subsidiary Origin Energy West Pty Ltd, to assign its interests in its joint venture exploration permits in the Canning Basin (including the Rafael conventional gas and condensate discovery), to a wholly owned subsidiary of Buru Energy for a future, capped reimbursement of costs linked to gas production success.
As part of the agreement, Origin will provide Buru with up to $4 million of the required funding for the Rafael 3D seismic survey which is planned to be acquired in the 2023 operating season.
Buru resumes its position as the dominant net acreage holder and operator in the Canning Basin, with ownership of a net 22,500 sq kms of permits including 100% of EP 129, EP 391, EP 428, EP 431 and EP 436; and 60% of the EP 457 and EP 458 permits it shares with Rey Resources.
Origin’s exit from the Canning Basin provides Buru and its shareholders with the autonomy and flexibility to aggressively pursue the commercialisation of its assets in the basin, focused on the Rafael conventional gas and condensate discovery that has been independently assessed to have the potential to hold recoverable volumes of over one TCF of gas and 20 million barrels of condensate, and including the Basin’s Carbon Capture and Storage (CCS) and natural hydrogen potential.
Photo - see caption
Buru Energy has provided the following update in relation to its operated Canning Basin permits EP 129, 391, 428, 431, 436, 457 and 458.
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