Energy: Twiggy Forrest-backed Buru edges closer to regulatory approval in the Canning Basin
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Junior oil & gas explorer Buru Energy (ASX:BRU) remains optimistic it will get the regulatory clearance it needs to advance its fracking operations in WA.
The company highlighted this morning that the WA government had now lifted a moratorium on hydraulic fracture stimulation (HFS) in the Dampier Peninsula, just north of Broome.
Fracking, or hydraulic fracturing, is a method of extracting oil and gas from small fissures underground. A high-pressure mixture of soapy liquid and sand is flushed down a well to crack open pores in rock and allow the gas or liquid to escape.
The HFS moratorium covered an area in which Buru holds a number of petroleum titles. Shares in Buru dipped 4 per cent to 24c this morning.
Buru said the lifting of the moratorium followed an Independent Scientific Inquiry last year which advised that fracking operations could be carried out in the area with low risk to the environment, as long as it was properly regulated.
Prior to the moratorium being lifted, Buru said it had carried out “a number of fracs” on three of its wells in the Canning Basin without incident.
While the government previously flagged the Dampier Peninsula as a “frac free zone”, Buru said it had worked “constructively” with regulators to ensure it operated within strict boundaries and offered peace of mind for local community residents.
The company said it now “looks forward to working with government to implement the recommendations of the Independent Scientific Inquiry for further regulation of the industry”.
Buru counts Andrew Forrest as a significant investor, after the Fortescue billionaire built up a stake in the explorer through the first half of this year.
The Canning Basin where Buru operates is an area of interest for Forrest, who also owns other acreage in the region through one of his private investment companies.
“We look forward to being able to demonstrate that the gas resources of the Canning Basin can be safely and efficiently extracted for the benefit of all stakeholders,” Buru said.
Junior explorer Metgasco (ASX:MEL) announced it had executed a farm-in agreement to drill for oil in the prospective western-flank region of the Perth Basin. The company will drill up to two exploration wells in the area, bearing 100 per cent of the costs with the option to take a 60 per cent equity interest in any discovery.
Brisbane-based gas developer State Gas (ASX:GAS) says it is progressing a targeted strategy to bring gas to market from the Reid’s Dome gas project in central Queensland. The company plans to drill two new wells and carry out two production tests, with work expected to commence before the end of the month.
And ADX Energy (ASX:ASX) provided a production update for its Iecea Mica-1 well in Romania. The company said mapping results “exceeded pre-drill expectations” and the well was being prepared for production testing. Shares in ADX were unchanged at 1.2c.