Buru Energy has started commercial oil production at its onshore Ungani oilfield, and begun exploration drilling at a second site.
Ungani’s initial production is 1,250 barrels of oil per day, with an eventual target production level of 3,000 bopd.
Commercial production at the facility begins after the receipt of formal production licences last week on July 6.
Buru ran the first production test of the two Ungani wells in May 2012, with the first successful shipment of oil from the facility reaching the port at Wyndham in December of 2013.
The facility, a 50:50 partnership between Buru and Mitsubishi, is located in the Canning Basin 100 kilometres east of Broome.
The company also announced today that drilling had begun on Praslin 1, the joint-venture’s second exploration well of the year.
It is expected that the well, which is located 15km west of Ungani, will take 33 days to drill.
Drilling started on the first exploration well of the season, Olympic 1, in May, and was abandoned last month with no significant hydrocarbons found.
The production commencement comes after the completion of upgrades to the Ungani facility, undertaken by contractors Momentum Engineering and Piped Energy.
The upgrades were overseen by Buru, with Mitsubishi free-carrying Buru’s capital costs as per the funding agreement between the two companies.
Buru executive chair Eric Streitberg said the company ended the financial year in a strong cash position of $41.9 million.
“We have the financial strength to fund our aggressive exploration program and create further growth for shareholders,” he said.
Buru also announced that the final investment decision of the gas sales agreement with Alcoa has been extended to July 31.
Shares in the company were up 3 cents to $0.44 a share at close of trade.
