Buru Energy has ticked off a significant commercial milestone, tabling a maiden independent assessment of reserves for its 100 per cent-owned Rafael gas-condensate field in Western Australia’s Canning Basin. The booking has now put firm numbers on the board and is an important step as the company looks to secure funding and advance the project towards a final investment decision.
The independent report, compiled by energy consultancy Sproule ERCE, outlines proved and probable (2P) reserves of 15.25 million barrels of oil equivalent (MMboe).
The resource comprises 65.7 billion cubic feet (Bcf) of sales gas, a solid 98.5 kilotonnes of liquefied petroleum gases (LPG's) and 2.9 million stock tank barrels (MMstb) of valuable condensate.
The company also booked proved (1P) reserves of 5.28 MMboe, providing a robust foundation for the project’s economics.
For an energy junior such as Buru, moving a discovery from a resource to a reserve is a major step. It signifies that the gas and liquids are not only technically recoverable, but crucially, they are also commercially viable, a distinction that is key to attracting project financing and potential partners.
Notably, while the initial development is based on the 2P reserves, the real blue-sky potential for Rafael appears to lie in its future growth potential. Sproule ERCE has also defined a substantial unrisked Contingent Resource (2C) of 21.24MMboe, which includes a hefty 105.7Bcf of gas and 2.7MMstb of condensate.
This contingent resource, which comfortably eclipses the initial 2P reserve, lays out a clear growth runway for Rafael through additional wells, compression and an extended facility life.
Management says confirmation of reserves now underpins a two-well development strategy for the project, roughly 100 kilometres east of Broome. The plan involves two horizontal wells, Rafael 1H and 2H, feeding a modular LNG and liquids processing facility.
Buru is aiming to drill and test the wells in 2027, followed by facility construction in 2028 and a target of first sales by early 2029.
Buru Energy executive chairman David Maxwell said: "The Rafael Reserves result is a landmark for Buru and a major step for the Rafael Gas Project. The maiden booking of independently assessed Reserves confirms a substantial, commercially robust resource base for the foundation long-term Rafael two-well development. It provides great confidence to Buru and other stakeholders as the project moves rapidly to a final investment decision."
Under a savvy commercial arrangement, Buru says its partner Clean Energy Fuels Australia (CFEA) will build, own and operate the midstream plant, limiting Buru’s major capital outlay to the upstream wells.
The proposed CFEA facility is designed to produce 300 tonnes of liquid natural gas (LPG) per day, with the LPG and condensate products destined for regional markets in the Kimberley, where fuel is currently trucked in at significant cost from the Pilbara or further afield.
Adding some welcome tailwinds for WA’s gas sector, Canberra’s watering down of its national gas reservation plan yesterday could play nicely into Buru Energy’s hands. With the draft recognising WA as a separate gas market and potentially allowing its federal obligation to fall to zero, Buru’s Raphael gas discovery could dodge another regulatory hurdle as the company hunts a commercial pathway into WA’s domestic market.
50 Kilometres to the west in the Canning basin, Buru's advanced Ungani oil field project recently delivered a whopping 200 per cent increase in potential recoverable oil volumes to 660,000 barrels. The company’s assessment of the restart opportunity at Ungani looks a timely one, emphasising its new plan to establish a local micro-refinery aligns perfectly with a growing focus on fuel security in the Kimberley. The WA Government has recently moved to secure four million litres of diesel for storage in the region, highlighting the pressing need for local fuel supplies.
With an independent expert now certifying the reserves, Buru appears to have significantly de-risked the Rafael project. The technical and commercial merits are now validated, giving the company a much stronger hand in discussions with financiers to move the project forward.
Buru's focus now shifts to execution. The company is pushing ahead with financing, commercial documentation and approvals to get its gas flowing into the energy-hungry Kimberley market before the end of the decade.
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By Murray Ward
