22/05/2018 - 14:24

Buru, Roc in $84m Canning Basin oil deal

22/05/2018 - 14:24

Bookmark

Save articles for future reference.

West Perth-based Buru Energy has sold a 50 per cent share in its Ungani oilfield to Chinese-backed Roc Oil for $64 million, as part of a broader deal the company hopes will unlock its assets in the Canning Basin.

Buru Energy is hoping to develop oil and gas assets in the Canning Basin.

West Perth-based Buru Energy has sold a 50 per cent share in its Ungani oilfield to Chinese-backed Roc Oil for $64 million, as part of a broader deal the company hopes will unlock its assets in the Canning Basin.

The Ungani operation is located east of Broome and includes two production permits, with four wells targeting output of about 2,500 barrels of oil per day.

Formerly an ASX-listed business, Roc Oil was acquired by Transcendent Resources, a subsidiary of Shanghai-based conglomerate Fosun International, in 2014.

The Sydney-based company has assets in South-East Asia.

For this deal, the $64 million payment will be split into two tranches.

The first $13 million will be paid immediately, while the remainder will be forwarded after regulatory approval.

A second part of the deal will give Roc a 50 per cent interest in three exploration permits, through a farm-in agreement to pay $20 million in a $25 million exploration program.

The two companies will drill four wells in the 2018 and 2019 drilling seasons, including at Ungani West and Kurrajong.

Buru will retain its permits for unconventional gas development in the Laurel Formation in the Canning Basin, including the Yulleroo gas field.

The company has been keen to attract capital to develop its resources in the basin, with a $10 million raising for work at Ungani in August 2017.

Chief executive Eric Streitberg told Business News the company would be considering a number of potential development options with the new capital.

“The main thing that we’d like to do is continue to develop our Canning Basin assets, and if we have some more success, were going to need cash to do that,” Mr Streitberg said.

“We’re very keen to make sure we’ve got enough on the balance sheet to continue to develop the assets to go forward.”

He said he would await the outcomes of the state government’s inquiry into unconventional drilling.

“We would hope the science would prevail,” Mr Streitberg said.

Buru was advised by Ocean Reach Advisory for the deal, and shares in the company were up 4 per cent to 38.5 cents each.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options