Production
Ungani Oilfield (L 20 & L 21 – Buru Energy 100%)
At the beginning of the year Buru executed a Deed of Settlement, Termination and Release with Roc Oil Company Pty Limited (ROC) for ROC’s share of liability for costs associated with future decommissioning activities for Production Licences L 20 and L 21. A settlement of $3.4 million was received on 12 March 2024 by Buru in relation to this Deed.
Buru entered into a Farm-in Agreement (Ungani FIA) with Sabre Energy Pty Ltd (Sabre) on 17 June 2024, for a 70% interest in the Ungani Oilfield production and exploration assets in Petroleum Production Licences L 20 and L 21. The Ungani FIA was a transaction whereby Sabre would contribute $1.0 million towards the costs associated with the recommencement of production operations at the Ungani Oilfield. Under the Ungani FIA Sabre would further assume an agreed proportion of the future abandonment costs in relation to the Ungani Oilfield, thereby significantly reducing Buru’s current abandonment liabilities. Sabre was to also provide a $5.0 million carry towards the costs of drilling the Mars well in the L 20 production licence.
On 26 September 2024 Buru terminated the Ungani FIA with Sabre due to Sabre’s inability to meet their commitments under the Ungani FIA.
Buru is continuing work with third parties to review opportunities to recommence production and sales revenue from the Ungani Oilfield 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.
Discussions with potential partners to participate in the high impact Mars exploration prospect within the Ungani Production Licences continue.
