Buru Energy (ASX: BRU) has reached a key milestone, producing oil from its Ungani field onshore Canning Basin following the start of its extended production test.
Initial results from the Ungani-1/ST1 well are promising with flow rates of more than 2000 barrels per day (bpd) of oil being produced.
The well will now be produced at varying rates to allow estimates of longer term sustainable flow rates and reservoir productivity, and to establish flowing parameters through the EPT facility.
Buru noted the EPT facility was designed with the capacity for a maximum sustained production of 1000bpd while technical requirements of the data gathering and testing program and limitations on the transport system would limit initial production to about 400bpd.
Produced oil, which is of very high quality, will be trucked to the BP refinery at Kwinana, Western Australia.
The extended production test is expected to be marginally cash flow positive during the initial test phase due to the high fixed costs from rental equipment and the engagement of specialist test personnel.
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.
Data from the test will also play a key role in determining placement and configuration of appraisal and production wells.
It will also provide valuable production operations information that will help optimise design of the full field development.
Buru was granted a Declaration of Location over Ungani earlier this week, allowing it to lodge an application for a production licence.
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