Buru Energy (ASX: BRU) is capitalising on its ongoing success in the onshore Canning Basin with the acquisition of majority interests in two permits that expand its access to the key Ungani oil trend and the Valhalla tight gas accumulation.
This will be funding through a fully underwritten A$40 million institutional share placement that highlights the level of support the company enjoys with institutional investors coming as it does just three months after a previous A$50 million placement.
Buru is acquiring a 90% indirect interest in EP 457 and EP 458 in the southern flank of the Fitzroy Trough area of the Canning by acquiring all the shares in Gujarat NRE Oil from its parent company for A$36 million.
These contain well defined prospective trends and well developed structural features.
The Laurel wet gas resource is interpreted to be present, as is the continuation of the Ungani oil trend along the southern margin. The Goldwyer Shale is also in the oil to wet gas window on the Jurgurra Terrace in the southern part of the permits.
The remaining 10% in the two permits is held by Rey Resources (ASX: REY).
Separately, Buru has also acquired the right to a 50% interest in the permit to be issued in application area 5/07-8 from Backreef Oil for a total of A$3.5 million.
While this is at a much earlier stage of exploration, it contains Laurel trend prospects, reefal anomalies, and shallow oil plays.
Taken together, the acquisitions give Buru a continuous and contiguous basin-wide acreage position of about 17 million acres in the Canning, a strategic position that positions it well to participate in any future consolidation as well as continuing the development of its many highly prospective plays.
Partner Mitsubishi Corporation has also been granted an option to acquire half of Buru’s interests in the three new permits by making a cash payment to Buru of A$19.75 million.
In the event that Mitsubishi exercises its option to acquire an interest in the permits, Buru will use the proceeds of that transaction to fund its continuing 2013 exploration and appraisal activities.
Institutional Placement
The Institutional Placement will be conducted by a variable price bookbuild that will be fully underwritten by JP Morgan.
New shares issued under the Placement will make up about 6% of Buru’s issued capital.
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