Buru Energy has entered into a Farm-in Agreement with Sabre Energy for the drilling of the high impact Rafael Shallow oil target in EP 428 in Western Australia’s onshore Canning Basin.
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 barrels.
- 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.'
Source: Buru Energy
