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Buru Energy Limited - High impact Rafael Shallow oil exploration well funding agreement executed, drilling targeted for Q3 2024
Buru Energy Limited - High impact Rafael Shallow oil exploration well funding agreement executed, drilling targeted for Q3
About this update from Buru Energy Ltd
Buru Energy Limited (Buru, Company) (ASX: BRU) is pleased to announce that it has entered into a Farm-in Agreement (FIA) with Sabre Energy Pty Ltd (Sabre) for the drilling of the high impact Rafael Shallow oil target in EP 428 in Western Australia's onshore Canning Basin (the Transactio Highlights Sabre will carry Buru for A$6 million of the costs associated with the drilling and testing of the Rafael Shallow exploration well to earn a 50% interest in a Commercial Discovery and subsequent Production Licence, with Buru retaining 50% interest and Operatorship. The A$6 million cost contribution represents a full carry of the well by Sabre, based on Buru's current estimate of drilling costs. Subject to a Commercial Discovery being declared, Sabre will pay Buru a further A$1.5 million in recognition of prior exploration expenditures incurred in relation to the Rafael Shallow prospect. Buru's internal assessment of the Rafael Shallow prospective resource volumes of recoverable oil indicates a range of between 3.2 MMstb (low estimate) and 79 MMstb (high estimate), with a Best Estimate of 19 million barrels1. An oil discovery could provide a rapid development path that would add substantial value for both Buru and Sabre and an additional funding path for Buru's 100% owned Rafael deep Phase 1 gas and condensate project, which remains the Company's development priority for this existing resource. Negotiations for a drilling rig contract are well advanced, drilling equipment and materials have been secured, and on-ground preparations and approvals are underway. Commencement of Rafael Shallow drilling operations is targeted for late 3Q 2024 as part of a two well exploration drilling campaign in 2024 that includes the Mars 1 well. Commenting on the transaction, CEO Thomas Nador said: 'This latest Transaction with Sabre Energy further demonstrates the strong alignment between our respective organisations and our common belief in the prospectivity of the onshore Canning Basin . Buru received strong interest from the market for participation in the drilling of the high impact Rafael Shallow prospect. Sabre's proposal provides Buru with excellent value for the Rafael Shallow prospect farmout and also offers significant strategic synergies with the Ungani partnership established earlier this year.' Regie Estabillo , Managing Director of Sabre Energy further noted: 'This Transaction shows that, like Buru Energy , we are enthusiastic about the onshore Canning Basin and are prepared to invest in the drill bit to create value for our venture with Buru. We are looking forward to the drilling program planned for later this year and are quickly building our own organisational capability to support Buru as operator of Rafael Shallow , and our future operatorship of the Ungani Oilfield.' Rafael Shallow Prospect Interpretation of the recently acquired Rafael 3D volume identified a highly prospective closure in the shallow geological section partly overlying the Rafael gas and condensate bearing structure that was not apparent on the wide spaced legacy 2D data. The structure is of considerable size (18 sq kms) and has over 125 metres of vertical closure in a threeway dip closed structure. The top and cross fault seals are provided by the thick and regionally extensive Noonkanbah Formation organic rich shales with a lack of internal faulting contributing to robust structural integrity. The target reservoirs in the closure are the Poole Sandstones and Grant Formation at less than 1,200 metres depth. The Poole and Grant reservoirs are clastic (sandstone) reservoirs similar to the previously discovered shallow oil pools on the Lennard Shelf in the vicinity of the legacy Blina Oilfield. This is a new prospect type for this part of the Canning Basin , and it is considered to have potential for regionally significant volumes of liquids. The target formations for the Rafael Shallow well are at a depth that can be safely and effectively drilled by a cost effective smaller mobile rig similar to that used to drill a number of the Ungani development wells and Canning Basin exploration wells. The Company is currently in advanced discussions with a rig vendor to drill the Rafael Shallow prospect in campaign with the Mars prospect, and is targeting to drill both prospects during the 2024 operating season. The drilling of the prospects is subject to the usual regulatory and other stakeholder approvals About Sabre Energy Sabre Energy Pty Ltd (Sabre) is a private Australian upstream energy company focused on assets that deliver accelerated revenue and sustainable supply generation. Sabre is chaired by Mr. Allan Bougoure, a highly successful provider of services to the oil and gas industry, and Managing Director, Mr. Regie Estabillo , an experienced petroleum engineer and former Chief Operating Officer of Omega Oil and Gas (ASX:OMA). As a relatively new company within the Australian oil and gas industry Sabre has been extremely successful in building a significant portfolio of production and exploration assets in a relatively short time frame with a demonstrated ability to attract strong investor funding. Sabre specialises in the exploration, appraisal and development of critical onshore energy assets that support local and regional economic growth while helping preserve Australia's energy security. Sabre is supported by experienced energy professionals with specialist skills and experience in commercialising Australian onshore energy assets. Sabre is actively investing in Australian onshore oil assets, most recently farming into PELA 679 in the Cooper/Eromanga Basin . Sabre's investment in the Rafael Shallow prospect in Western Australia's Canning Basin is an exciting addition to the company's growing portfolio of first-class resources assets, which includes a 70% interest in the Ungani Oilfield (pending customary approvals). Sabre recognises the immense potential of the Canning Basin and is committed to further investment as a trusted partner with Buru to help unlock the basin's energy resources Contact: Thomas Nador Chief Executive Officer Tel: +61 8 9215 1800 Email: [email protected] (C) 2024 Electronic News Publishing, source ENP Newswire