Join our daily newsletter At The Bell to receive exclusive market insights
- Around 200% increase in potential remaining recoverable oil volumes
- Contingent resources now at 660,000 bbls
- Operating costs per barrel expected to decrease
- Ungani offtake options being assessed
Buru Energy (ASX: BRU) has reported a significant upgrade to the estimated remaining recoverable oil at its onshore Ungani oil field, located in the onshore Canning Basin in Western Australia’s north.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
The upgrade in numbers at Ungani comes after Buru undertook an assessment of alternative restart opportunities with the objective of reducing costs, increasing the product price and increasing the remaining oil to be produced. This review has included reservoir model simulation evaluating various production philosophies by an independent reservoir engineer.
The Ungani oil field has been under care and maintenance since August 2023. Up to this time the operating model was based on Electric Submersible Pumps (ESP), with produced water being re-injected. Ungani oil was then trucked over 1,000 km to Wyndham; from where it was exported to crude oil refineries in Asia at a price based on the Brent crude marker.
The field is expected to see a period of flush production after being brought back into production due to water coning around each well relaxing and the oil water contact re-equilibrating. This is a known feature of analogue reservoirs and has been confirmed in the production history at the Ungani Field. Reservoir modelling predicts that careful management of this flush production at an Ungani field restart should see several years of plateau production from the field.
Following this reservoir and operating review, Buru estimates that the 2C Contingent Resources attributable to the Ungani oil field have increased by approximately 200%, from 220,000 bbls to 660,000 bbls, and possibly more. Recovery of these contingent oil resources is subject to the maturation of commercial restart and offtake options.
Trucking and export costs under the previous operating model contributed more than 50% of the operating costs. With potential cost savings in mind, Buru is currently assessing the market opportunities, including establishing a micro-refinery to process Ungani crude oil to diesel and other products to supply the greater Kimberley region.
“The increase in the estimated Ungani 2C Contingent Resources is a significant value uplift opportunity for Buru at a time when the strategic importance of local energy security is clearly evident. Changing the operating model and significantly reducing the transport and operating cost are the objectives of our assessment of new and more valuable offtake and market options in the region – including a micro- refinery,” EC, David Maxwell, said.
BRU is up 16.7% to 1.4¢. Mkt cap $13.85M.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
