Buru Energy’s (ASX: BRU) move to start extended production testing at its Ungani oil field has resulted in an ASX query about the 66.5% increase in its share price to an intra day high of A$3.03 today.
The company had said yesterday that it had received all approvals needed for the test and had started initial on ground works.
These are expected to take about six weeks to complete and testing of the Ungani-1/1ST1 and
Ungani-2 wells is expected to begin in mid-April. This will refine the current range of 5 to 20 million barrels of recoverable oil in the Ungani oil field.
Ungani-1/1ST1 had flowed fluids at rates of up to 1647 barrels per day with about filtrate, formation fluid and lost circulation material making up 15% of the flow prior to it being shut-in while Ungani-2 flowed at rates of up to 1026 barrels of fluid per day.
Testing is expected to take about six months and the produced oil will be trucked to Kwinana, Perth, for sale to the BP refinery.
An all-weather access road has been constructed to ensure that heavy vehicle access to the Ungani site can continue throughout the remainder of the wet season.
Data obtained from the EPT will be a key in determining appraisal and production well placement and configuration, and will also provide valuable production operations information that will assist in optimising the design of the full field development.
Buru said in response to the ASX query the prospect of an extended test with oil produced being sold could have been a key reason for the share spike.
It has also said in an update today that it had identified mean risked potential resources for the greater Ungani exploration area of more than 300 million barrels of oil as well as 4 drillable targets identified near the Ungani Oilfield along with more than 20 leads and prospects.