Buru Energy Triples 2C Contingent Resources in Restart Review at Ungani Oil Field

Buru Energy (ASX: BRU) has increased the estimated remaining recoverable oil at its 100%-owned Ungani oil field in Western Australia by about 200%, lifting 2C contingent resources from 220,000 barrels to 660,000 bbls.

The onshore Canning Basin field has been under care and maintenance since August 2023, with Buru now reviewing alternative restart options aimed at cutting costs, improving realised product pricing, and increasing the volume of oil ultimately recovered.

An independent reservoir engineering review and modelling of alternative production approaches underpins the revised resource estimate, which remains contingent on Buru maturing a commercial restart plan and suitable offtake arrangements.

The review also points to the potential for several years of plateau production following a restart if an anticipated period of flush production is carefully managed.

Restart Targeting Lower Costs

Ungani previously operated using electric submersible pumps with produced water reinjected, while crude oil was trucked more than 1,000 kilometres to Wyndham for export to Asian refineries at pricing linked to the Brent crude marker.

Buru identified transport and export expenses as accounting for more than 50% of operating costs under that model, making changes to the field’s route to market a central part of the restart assessment.

Buru expects water coning around each well to relax while the field is shut in and the oil-water contact to then re-equilibrate, creating a period of flush production when operations resume that has also been observed in Ungani’s production history.

Reservoir modelling indicates that managing this initial production carefully could allow Ungani to maintain plateau output for several years, supporting the increase in estimated remaining recoverable volumes.

Local Processing Option

Buru is assessing potential offtake alternatives including development of a micro-refinery capable of processing Ungani crude into diesel and other products for supply into the greater Kimberley region.

Such an approach is being considered as part of efforts to reduce transport and operating costs and increase the value realised from production compared with the previous export model.

“The increase in the estimated Ungani 2C Contingent Resources is a significant value uplift opportunity for Buru at a time when the strategic importance of local energy security is clearly evident,” executive chair David Maxwell said.

“Changing the operating model and significantly reducing the transport and operating cost are the objectives of our assessment of new and more valuable offtake and market options in the region, including a microrefinery.”

Resource Upgrade Support

The revised 2C Contingent Resources estimate was prepared under the Petroleum Resources Management System, and is based on information and supporting documentation prepared under the supervision and review of Buru director and reservoir engineer Joanne Williams.

Ms Williams has more than 25 years of relevant oil and gas industry experience and is a member of the Society of Petroleum Engineers.

Buru considers the revised estimate could ultimately exceed 660,000 bbls, although recovery remains subject to securing a commercially viable restart and offtake pathway.

The company is continuing to assess commercial restart and offtake options, with recovery of the upgraded contingent resources dependent on those pathways maturing.