Buru Energy (ASX: BRU) has reached a key milestone towards full development of the Ungani oil field in the onshore Canning Basin.
Western Australian Mines and Petroleum Minister Norman Moore issued a Declaration of Location over the field, verifying Buru's interpreted extent of the field and proposed process for commercial development.
This involved a technical and geological examination of the oil field and covers the four graticular blocks around the field as requested by Buru.
Buru has now lodged an application for a production licence over the field, which contains details of the proposed full scale development process for review and assessment by the Department of Mines and Petroleum.
It also formally commences the Native Title negotiation process with the Yawuru and Nyikina-Mangala peoples, which Buru said it had longstanding good relations with and is already actively engaged with them on an ongoing basis in its current operations.
Ungani Appraisal
Buru is also progressing its appraisal work on Ungani with preparations for the start of the extended production test now largely complete and first oil production expected in the coming days.
Testing of the Ungani-1/1ST1 and Ungani-2 wells is expected to take about six months to complete and will refine the current range of 5 to 20 million barrels of recoverable oil in the Ungani oil field.
The test will initially be constrained at 500 barrels of oil per day with a planned increase to 1000bpd as experience is gained in the production characteristics of the field and the management of the transportation system.
Produced oil will be trucked to Perth during the test.
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.
Meanwhile, the planning and approval process for the Ungani 3D seismic survey, to further define the size of the field, is largely complete with on-ground work expected to start in mid-June.
Both are critical steps in the definition of the field’s reserves and determination of the optimum full field development plan.
Paradise Deepening
Meanwhile, Buru said deepening of the Paradise-1 well has been slower than anticipated due to minor rig problems and increased hole deviation.
The well is currently at a depth of 2392 metres out of a planned total depth of 3200 metres.
Paradise-1 had earlier encountered the top of the Upper Laurel Formation at 1968 metres measured depth.
Gas shows in the Upper Laurel section drilled to date appear similar to those seen in Valhalla North-1 and Valhalla-2, with gas peaks some 10 times above background at 30 to 40 units, although absolute values are lower in this well due to different drilling parameters.
Paradise-1 well is located in exploration permit EP 428 about 200 kilometres southeast of Derby, Western Australia.
Buru and partner Mitsubishi Corporation each hold 50% in the permit with Mitsubishi contributing 80% of the well costs under the terms of its farm-in agreement.
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