Buru Energy Ltd (ASX:BRU, OTC:BRNGF) has moved on from its farm-in agreements (FIAs) with Sabre Energy Pty Ltd, securing new funding to maintain the momentum of its activities, which include drilling the Rafael Shallow oil exploration well in the near-term.
Resilience to safeguard strategy
“Despite the challenges faced by Buru due to a third party having failed on their commitments, the company continues to demonstrate resilience to safeguard its strategic objectives towards preserving and growing shareholder value,” Buru CEO Thomas Nador said in relation to the asset transactions and the capital raising.
“Through the strong support of existing shareholders, new institutional and professional investors and our directors, Buru is well placed to maintain the development momentum of its foundation Rafael gas project; the drilling of the high potential Rafael Shallow 1 oil target in the near future and work toward restarting oil production from the Ungani Oilfield.”
Buru terminated both the Rafael Shallow and Ungani contracts following Sabre’s failure to meet its financial obligations under the agreements, with both parties executing agreements to release and discharge each other from any liabilities relating to the FIAs.
Alternative funding garnered
Buru has secured alternative funding for the Rafael Shallow 1 exploration well.
The company has entered into farm-in transactions with two entities linked to long-term shareholders, securing $3 million in funding.
The new agreements allow these entities to earn a collective 25% interest in a commercial discovery and subsequent production licence, with terms similar to the original Sabre agreement.
Buru will retain a 75% interest in the well and maintain full ownership of the Ungani Oilfield.
Additionally, Buru has wrapped up an oversubscribed share placement, raising $6.7 million before costs.
The placement, at 6.2 cents per share, attracted strong support from institutional and professional investors, as well as participation from the company’s directors, subject to shareholder approval.
The funds will be used to advance the commercialisation of the Rafael Gas Project, the drilling of the Rafael Shallow 1 well, and the restart of production at the Ungani Oilfield.
Buru has also executed a drilling contract with Silver City Drilling, with mobilisation of Rig 24 underway, aiming to commence drilling in October 2024.
The capital raised will support the development of key assets and ensure continued progress in Buru’s strategic initiatives.