Buru Energy Ltd. said Monday it had raised AUD 2.1 million ($1.37 million) from a placement and plans to issue more shares amounting to AUD 3 million ($1.95 million).
The stock sales are intended for the Rafael natural gas development in Western Australia’s onshore Canning Basin.
The AUD 2.1 million placement was offered to “sophisticated and professional investors who are highly supportive of the company’s strategy to advance the Rafael Gas Project”, West Perth-based Buru said in a regulatory filing. The offering was priced two Australian cents per share.
“[E]ach new share issued under the placement will also receive an attaching option on a 1 for 2 basis with a strike price of 3.0 cents, and an expiry period of 2 years”, subject to shareholder approval, Buru said.
Meanwhile the new stock sale will have the same price and attaching options as the prior placement. It will be open to all shareholders September 8.
“The funds will be used to ensure that key project activities that are Buru’s responsibility under its Strategic Development Agreement with Clean Energy Fuels Australia (CEFA) for the development of the Rafael Gas Project, including but not limited to the securing of an upstream development partner to fund the 2026 Rafael appraisal program, are progressed in support of Final Investment Decision in 2H 2026”, Buru said.
Last April Buru announced a deal with CEFA to co-develop Rafael. CEFA would own the downstream components of the project.
Last month Buru said it had identified a new prospect that could grow resources for the Rafael project. Identified from Rafael 3D seismic data, the Flying Fox prospect lies immediately beneath the gas and condensate field at about 4,015 meters (13,172.57 feet) True Vertical Depth Subsea.
Buru assessed gross unrisked prospective resources of 60-614 billion standard cubic feet (Bscf) gas with a best estimate (P50) volume of 247 Bscf, and 1.2-12.6 million stock tank barrels (MMstb) of condensate with a best estimate of five MMstb.
“This is similar in size to the contingent resources assessed for the primary Rafael reservoir interval which currently forms the basis for the Rafael Gas Project”, Buru said.
“Whilst Buru’s immediate focus is the timely commercialization of the Rafael Gas Project, future exploration success at Flying Fox could have significant additive benefits for the project, both in terms of potential resource addition to a base development as well as the potential to maintain ‘higher for longer’ gas flow rates”, chief executive Thomas Nador said.
Flying Fox is in EP 428 and EP 457, while Rafael is in EP 428.
Rafael, about 150 kilometers (93.21 miles) east of Broome and around 85 kilometers south of Derby in the Shire of Derby-West Kimberley, is the only confirmed source of conventional gas and liquids onshore Western Australia north of the North West Shelf Project, according to Buru.
Buru recently tweaked the timeline for Rafael but still aims to start production late 2027. It expects the project to supply trucked liquefied natural gas and liquids to Pilbara and the Northern Territory. Buru plans to drill two wells, including the 2021 discovery.
Under the new timeline, instead of recompleting the discovery well as a producer before drilling the second well, Rafael B, Buru will now drill and test Rafael B first.
The change aims “to reduce risk and increase the probability of higher reserves”, Buru said in a disclosure on the Australian Securities Exchange July 17.
Nador said at the time, “The Rafael technical assurance process has delivered valuable information to underpin decision making on the risks and opportunities of our planned Rafael appraisal and production flow test program”.
Earlier in July Buru said it had received government approval for a two-year extension of time for Rafael to apply for a production license. Western Australia’s Mines, Petroleum and Exploration Department gave the project until July 2027. Buru eyes a 20-year productive life for Rafael.
To contact the author, email jov.onsat@rigzone.com
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