- Buru Energy (BRU) has signed a farm-out agreement with Origin Energy (ORG) for an exploration program at Canning Basin in WA
- As part of the transaction, Origin will carry out drilling at the Rafael conventional oil prospect and other areas within the basin
- In return for the exploration work the energy company will earn a 50 per cent interest in all five of Buru’s exploration permits
- Origin will need to spend an initial $17 million on exploration costs and back payments to earn the interest, with work to begin in 2021
- Along with the agreement announced today, Origin has agreed to earn an interest in two exploration permits held by Buru and Rey Resources
- Shares in Buru Energy are trading up 12.9 per cent at 10.5 cents each, while Origin Energy is trading down 1.12 per cent at $4.32 per share
Buru Energy (BRU) has signed a farm-out agreement with Origin Energy (ORG) for an exploration program at the Canning Basin in northern WA.
As part of the transaction, Origin has agreed to carry out drilling at the Rafael conventional oil prospect and other areas within the basin.
In return, the leading energy business will earn a 50 per cent interest in Buru’s five exploration permits in the area.
Origin will spent $16 million on an initial work program, which includes a commitment to drilling the Rafael 1 and Kurrajong 1 wells in 2021.
The company will also hand over a $1 million back payment to Buru once the transfer and registration of the permits is officially lodged.
Additionally, Origin has agreed to pay the first $3 million of expenditure towards 2D seismic acquisition surveys targeting new potential drilling prospects.
It will also carry the first $4 million of expenditure if both parties decide to
acquire a 3D seismic program over the Rafael prospect once drilling is complete.
“[The agreement] affirms Buru’s view that the Canning Basin is underexplored and is an attractive area for new field exploration, building on Buru’s existing oil and gas discoveries,” Buru’s Executive Chairman Eric Streitberg said.
“We are delighted that we now have a firm commitment to drill the world-class Rafael prospect and we will be entering into a rig contract for the drilling program as soon as practicable,” Eric added.
“We are also excited to be joined in the Basin by Origin who are highly experienced in both the upstream and downstream oil and gas business in Australia and bring particular operational and marketing skills in the dynamic and growing Australian gas market,” he concluded.
Along with the agreement announced today, Origin has also agreed to earn an interest in two exploration permits held by Buru and Rey Resources.
Shares in Buru Energy are trading up 12.9 per cent at 10.5 cents each, while Origin Energy is trading down 1.12 per cent at $4.32 per share at 12:35 pm AEDT.