Buru Energy Ltd has a clear focus “to do all that is needed to deliver its 100%-owned Rafael Project, which is the most value accretive pathway for the company and the stakeholders,” according to chief executive officer Thomas Nador.
In Buru’s December quarterly report, the CEO said: “As the only proven conventional gas and liquids resource in the greater Kimberley region, developing Rafael is a unique opportunity for the company to build a foundation energy business to supply an established and growing regional energy market.
“The Rafael Project is forecast to generate long-term annual cashflows that are in excess of the company’s current market capitalisation in less than three years from now, and it provides opportunities for regional development through the provision of a cost-competitive, secure source of dispatchable energy.”
Uniquely positioned
The company is focused on establishing a Kimberley-based gas and liquids business to deliver long-term annual cashflow from late 2027 through the onshore Rafael Project in the Canning Basin of Western Australia.
Rafael is uniquely positioned as the only proven conventional gas and liquids domestic resource in the greater Kimberley region.
Buru is targeting the replacement of long-haul trucked or imported fuel used for power generation with a local source of trucked Liquified Natural Gas (LNG) and liquids thus providing a cost-competitive, secure and emissions-reduced source of dispatchable energy for the region.
Project timeline
A Final Investment Decision (FID) for the project is planned for late 2025 with production scheduled to begin in the second half of 2027, enabling Buru to become the region’s sole future gas and liquids energy producer and supplier.
This timeline aligns with the Western Australian State Government’s plans to overhaul the Kimberley energy system by 2028.
Having completed the Rafael development concept selection, Buru’s immediate priority is to secure commercial agreements for the Rafael Project development and gas and liquids offtake.
With the Rafael development concept selection now complete, Buru’s Q1 2025 priority is to secure commercial agreements for the Rafael Project development and gas and liquids offtake.
Discussions with several parties are underway, including potential customers, LNG facility builders, owners and operators.
The discussions include funding facilities and customers seeking supply from late 2027/early 2028 and Buru is targeting the execution of commercial agreements later this quarter.
Rafael Project development timeline.
Near-term plans
During the quarter, Buru continued geological and geophysical work to support the development of the Rafael Project.
Further production testing of the original Rafael 1 well and potentially drilling of a second well (Rafael B) is planned for the 2025 Kimberley operating season.
The drilling program will provide additional confidence in well productivity and flow assurance to support the Rafael Project.
Several studies have recently been completed which support the characterisation of the Ungani Dolomite reservoir and aid development planning for the Rafael Project.
Enhanced subsurface imaging of Rafael accumulation and the Ungani Dolomite reservoir has increased confidence of the in-place resources to support the Rafael Project.
These studies improve the understanding of pore space created by dolomitisation and natural fracturing with these learnings to be applied to the proposed 2025 production flow testing.
Buru’s operational areas in the Canning Basin of Western Australia.
Ungani Oilfield progress
At the Ungani Oilfield, Buru continued working with third parties to review opportunities to re-establish production and sales revenue by establishing an alternative regional export route to the previous Wyndham trucking, storage and shipping model.
Analysis to date indicates that the most economic path to produce the remaining Ungani resources involves a field production rate of between 200-250 bopd. This is lower than the previous operating model that required field production rates of 400 bopd or higher to account for the higher fixed costs associated with the Wyndam export route.
The restart of Ungani production at the optimised production level and a different route to market requires the renegotiation of certain commercial terms pursuant to the existing Ungani Native Title agreements and requisite field management regulatory approvals.
Buru is focused on achieving the restart of the Ungani Oilfield as early as practicable upon conclusion of the analysis and negotiations.
Discussions with potential partners to participate in the high-impact Mars exploration prospect and other exploration and appraisal opportunities within the Ungani Production Licences continued during the quarter.
Cost reductions
Buru has also commenced the process with the WA Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) to rationalise its exploration acreage in the Canning Basin. The rationalisation is aimed at:
- holding and maintaining a corridor of key exploration areas around known assets and the highest potential prospects and leads and surrendering non-core acreage;
- surrendering areas with operational limitations and low value within the Fitzroy River Buffer; and
- retaining areas with outstanding decommissioning and rehabilitation obligations.
This process is forecast to deliver a significant reduction in the exploration permit and production licence areas from 13,200 square kilometres (165 blocks) to 5,440 square kilometres (68 blocks).
It will also result in a material reduction in exploration work program commitments and expenditure associated with surrendered areas as well as reduced internal costs, annual fees, levies and surcharges.
The company is also on schedule with plans to divest its integrated energy subsidiary companies 2H Resources and Battmin with discussions for both well advanced and expected to be concluded this quarter.
"The company has undertaken a review of its portfolio during the quarter and implemented measures to ensure its resources and capital are prioritised to the delivery of the Rafael Project," Nador added.
"The review has delivered a forecast reduction of up to $3 million in annual expenditure through the planned near-term divestment of the 2H Resources and Battmin subsidiary company assets, Canning Basin acreage rationalisation and headcount and operating cost reductions."