Buru lands investor for Canning Basin oil in deals worth $84m
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Buru Energy has found an investor for its Canning Basin oil licences in Western Australia.
Sydney-based oil explorer Roc Oil is buying 50 per cent of two Ungani production licences, L20 and L21, for $64 million.
Buru (ASX:BRU) gets $13 million now and the rest once the Department of Mines, Industry Regulation and Safety approves the production licence transfers.
It’s also buying a half-interest in three other exploration permits by funding this year’s exploration program.
It’s paying $20 million of the $25 million exploration program.
Four wells are due to be drilling in 2018 and 2019, including the Ungani Dolomite conventional oil prospects at Kurrajong and Ungani West.
“It provides Buru with the balance sheet strength to further develop the company’s assets from internal resources in the short to medium term,” said Buru chairman Eric Streitberg.
“The exploration program will enable us to potentially replace and increase our oil resources and also allow us to drill the deeper higher value oil targets such as Rafael on an appropriately promoted cost sharing basis.”
Buru said at the end of March that it was getting $78 a barrel for its oil (currently worth $US59).
The deal doesn’t include the Laurel Formation unconventional gas field that lies within the above permit zones.
Buru remains the operator of the producing fields and the owner of the Ungani field.
Roc Oil is a subsidiary of Roc Oil Company, itself a subsidiary of Hong Kong-listed Fosun International.
The Ungani Oilfield produces about 2600 barrels a day of oil from four production wells. Two of these are recent additions as they were drilled in late 2017 and early 2018.
Buru shares rose 4 per cent on Tuesday morning to 38.5c.
Buru has been contacted for comment.