Buru banks another $1.2m from latest Ungani oil sale
ASX-listed Buru Energy has received $1.2m in cash for its share of the latest sale of crude oil from its Ungani oil field in Western Australia’s Canning basin. This is the third oil sale for this year and rounds out a solid first half for Buru that was already sitting on a cash pot of $30 million at the end of the March quarter.
The Perth-based oil producer exported a total of 76,817 barrels of Ungani crude on behalf of the joint venture via the Wyndham port on May 13th. The loading by Petro-Diamond Singapore Pte Ltd is the last under its current contract with Buru and was provisionally invoiced at A$1.2 million net to Buru.
The company said the final invoice may yet be adjusted as it is subject to pricing related to the average dated Brent crude benchmark for May, a price that was strengthening through the month.
Buru said the Ungani field continues to produce at around 1,500 barrels of oil per day with all wells currently producing. Buru’s operations at Ungani have a high degree of flexibility allowing it to suspend production relatively cheaply if it is considered prudent. The JV is considering this option while Buru holds discussions with global crude traders around future longer-term offtake contracts beyond June 30th this year.
Management said its next oil storage fill, or ‘tank tops’, was likely to be in early July and export of that volume would be subject to spot market lifting terms. However, it is feasible that holding off on the next export lifting could be financially beneficial if the negotiations bear better fruit.
Buru retains a strong balance sheet and has made serious inroads into getting its cash burn down after it recently paired back personnel costs by 50%. Its $30 million cash pot will also help it ride out the Coronavirus and oil price storm. The company also said it is almost debt free with only $2 million in debt due at the end of 2020.
Elsewhere, Buru reported that it has seen strong interest in its farmout process with multiple companies visiting its virtual data room to assess its portfolio of conventional oil prospects and world-class basin-centred gas resources. Buru is looking to find a new exploration joint venture partner to share the burden of costs around its next exploration drilling program.
Buru is in a reasonably good position compared to some of its peers and well positioned too for the global oil market to return to some degree of normality as countries start to open up again after the global COVID-19 lockdown.
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