Exploration and Appraisal
Buru’s petroleum acreage in the onshore Canning Basin of Western Australia is uniquely positioned to transform the Kimberley energy system, and to develop a new world class energy province that leverages the Basin’s carbon capture and storage, and solar energy resource potential.
The Company’s Rafael gas and condensate discovery in a conventional reservoir presents significant opportunity for the Kimberley region to replace/displace the current gas and diesel imports for its energy needs, and to add to Western Australia’s resource endowment.
Refael Discovery – The Catalyst For Appraisal and Development
The Rafael 1 well is located on Exploration Permit 428 in the Canning Basin, some 50 kilometres to the east of the Ungani Oilfield and some 150 kilometres east of Broome. The well was drilled in late 2021 and defined a significant conventional gas and condensate resource in the Ungani Dolomite equivalent reservoir and in the dolomitised Upper Laurel Carbonate reservoir.
A limited section of the interpreted hydrocarbon column in the Ungani Dolomite reservoir was flow tested in 2022 and confirmed high quality gas with low reservoir CO2, and a high condensate content of 40 barrels per million cubic feet of gas.
Subsequent to flow testing the Rafael well, ERCE Australia Pty Ltd (ERCE), a specialist resource assessment consulting group, assessed both the Contingent Resources in the Ungani Dolomite equivalent section and the Prospective Resources identified within the separate Upper Laurel Carbonate zone and confirmed that subject to further appraisal, the Rafael accumulation has the potential to hold recoverable resources of over one TCF (trillion cubic feet) of gas and over 20 million barrels of condensate.
The detailed results of ERCE’s assessment and required disclosures and qualifications are set out in the ASX announcement dated 26 April 2022.
In February 2023, subsequent to Origin Energy’s change of strategic focus away from upstream oil and gas activities, Buru acquired Origin’s Canning Basin Joint Venture interests, including the Rafael discovery, thus resuming the Company’s position as the dominant net acreage holder and operator in the Canning Basin, and 100% owner of the Rafael discovery.
The Western Australian government subsequently approved Buru’s Declaration of Location application for the Rafael discovery in July 2023, paving the way for the future application for a Production Licence which is required for the development of the resource.
Rafael Appraisal Program
During the year Buru completed the acquisition of the Rafael 3D seismic survey covering an area of approximately 200 sq kms over and around the Rafael gas and condensate accumulation within the EP 428 and EP 457 permit areas.
The low impact seismic survey was completed safely, on time, and on budget by Terrex Seismic who have a long history of safe and environmentally responsible survey acquisition in the Canning Basin.
As part of Origin Energy’s exit from its Canning Basin joint venture interests in February 2023, a funding contribution of up to $4 million towards the seismic survey program was negotiated by Buru and this significantly reduced the cost exposure of the survey to the Company.
The seismic survey program also included the acquisition of several 2D seismic lines in exploration permit EP 457 (Buru 60% and Operator), aimed at enhancing the definition of prospects identified on existing data that could potentially provide exploration opportunities complementary to a Rafael development.
The new seismic data is being processed with industry leading techniques and completion of this processing and interpretation of the full 3D volume will assist with Rafael appraisal well planning and the appraisal/development partner selection process.
To maintain the planned appraisal drilling schedule, Buru has placed orders for well equipment long lead items in November 2023 to support the drilling of an appraisal well, and the recompletion and test of the Rafael 1 well, planned for the Kimberley field operating season in the second half of 2024.
Development and Commercialisation
In August 2023 Buru confirmed a phased development strategy to commercialise the Rafael discovery. This strategy selection followed completion of concept studies in collaboration with Petrofac Limited, Transborders Energy and Technip Energies for development concepts that cover the full range of independently assessed contingent resources of gas and condensate.
A phased development generates early cashflows with staged capital expenditure, delivering accelerated benefits to shareholders and the Kimberley, and optimises a larger scale development based on Rafael resource appraisal outcomes. Phase 1 of the Rafael development (Figure 1) includes a small footprint, scalable, Kimberley-based hybrid gas to power and renewables project based on the already defined low-case volume estimate of the Rafael contingent resource.
This project is designed to meet the forecast energy needs of the Kimberley, significantly reducing the reliance of imported LNG and diesel fuel to support electricity generation and the broader energy needs of the region.
During the year Buru awarded GHD Pty Ltd (GHD) the pre-Front End Engineering Design (pre-FEED) scope for the Rafael Phase 1 development. This work is due to be completed in early 2024, in support of planned commencement of Front End Engineering Design (FEED) in the second half of 2024, Final Investment Decision in 2025, and first production for the project targeted for 2027.
A larger Phase 2 development is planned to follow rapidly, which will be informed by appraisal drilling results in late 2024, with concept selection by mid-2025 and commencement of FEED shortly thereafter.
Concept studies completed during the year for a Phase 2 development have demonstrated commercial attractiveness for larger scale ammonia, methanol, and LNG projects, complemented with Carbon Capture and Storage (CCS) – project concepts which are supported by mid to high-case volume estimates of Rafael contingent resources.
Phasing the Rafael development will deliver numerous benefits including early cashflows to Buru and reduced capital expenditure to reach first production and cashflows. Phasing the development will also facilitate a wider range of project financing options (including access to government grants and incentives), and an overall improved funding position for Buru.
In parallel, independently verified CO2 storage capacity studies have been completed by Buru’s GeoVault subsidiary, that confirmed that Buru’s current operational area in the Canning Basin has the capacity to store not only carbon emissions related to a potentially large scale Rafael development but that of other carbon emitters, including potential international carbon emitters.