Onshore oil producer Buru Energy has taken full ownership of the Ungani operation in the Canning Basin as part of an asset swap with its joint venture partner, Mitsubishi Corporation.
Under the terms of the asset swap, Buru will receive Mitsubishi’s 50 per cent stake in the Ungani oilfield along with three nearby tenements and another exploration permit.
Mitsubishi will in turn receive Buru’s 50 per cent stake in a separate exploration permit in the Kimberley, along with its stakes in two applications for special prospecting authorities.
Buru shares surged on the news, closing 18 per cent higher to 19.5 cents each.
“This transaction is a logical outcome of the work the joint venture has undertaken in the Canning Basin since 2010,” Buru executive chairman Eric Streitberg said.
“We have enjoyed an excellent working relationship with Mitsubishi Corporation and we will continue to be engaged with them both through our assistance with the EP 371 operations, and our continued joint venture interest in EP 457 and EP 458.
“This transaction provides both Buru and Mitsubishi Corporation entities the ability to achieve their corporate objectives by progressing their respective projects without the corporate and commercial boundaries currently in place under the existing joint venture arrangements.
“Buru gains access to 100 per cent of the cash flow from the Ungani oilfield where production will shortly recommence, together with 100 per cent of the highly prospective exploration permits covering the Ungani oil trend, and continued exposure to the Laurel tight gas accumulation.”
Buru suspended production at Ungani in January last year in the wake of a low oil price environment, coupled with high trucking costs for transporting the product.