Buru Energy Ltd (ASX:BRU, OTC:BRNGF) is delivering on its strategy to glean long-term cashflows from its flagship Rafael Project in Western Australia, with work progressing on several fronts.
The Rafael Project, the only proven conventional gas and liquids resource in the Kimberley region, is progressing towards a final investment decision (FID) targeted for late 2025, with first gas production planned for the second half of 2027.
Locally sourced, low-cost solution
The project aims to provide a locally sourced, cost-competitive and emissions-reduced energy solution for power generation and mining in the Kimberley, replacing long-haul trucked or imported fuel with trucked Liquefied Natural Gas (LNG).
Buru is planning to establish a Kimberley-based gas and liquids business that will generate long-term annual cashflows from late 2027 that are well in excess of the company’s market capitalisation today.
“Buru Energy is finishing the year with a very clear focus,” CEO Thomas Nador said.
“This is to do all that is needed to deliver the foundation Rafael Project and thereby establish long-term foundation cash flow.
“I thank our shareholders for their support as we implement the changes directed at generating significantly increased value.”
Offtake partnerships
Buru is moving forward with gas and liquids offtake and partnering discussions for Rafael, with a target date for the execution of commercial agreements set for the first quarter of 2025.
The company has completed its development concept selection and is now prioritising commercial agreements.
Discussions with potential customers, LNG facility developers and funding partners are ongoing.
Additionally, Buru is working with the Northern Australian Infrastructure Facility (NAIF) to explore an additional financing option for the project.
Subsurface imaging
Work has been moving ahead on focused geological and geophysical work to support Rafael’s progress to development.
The company has conducted enhanced subsurface imaging of Rafael accumulation, and the Ungani Dolomite reservoir has provided increased confidence of the in-place resources to support the Rafael Project.
Planning is afoot for more on-ground activity in 2025 to provide added confidence in Rafael well productivity and flow assurance.
Ungani oilfield
Discussions and engagement is underway with offtake and sales parties to support the resumption of Ungani oil production.
Analysis suggests a production model of 200-250 barrels of oil per day (bopd) is more economical than the previous model, which required 400 bopd.
Restarting production will involve renegotiating Native Title agreements and securing regulatory approvals.
Streamlining portfolio
To streamline operations, Buru is rationalising its Canning Basin holdings, reducing its exploration footprint by more than 50% from 13,200 square kilometres to 5,440 square kilometres.
This would lower costs and commitments while maintaining high-priority exploration areas. Completion of the rationalisation process is expected by mid-2025.
Buru is also on schedule to divest subsidiary companies including natural hydrogen and helium subsidiary 2H Resources in the first quarter of 2025.
Similarly, Buru is in advanced discussions to divest its interest in the Barbwire Terrace Project, a joint venture with Sipa Resources focused on base-metal exploration.
Both transactions are targeted for completion in early 2025, which will support Buru’s strategy to focus on core assets and future energy opportunities.