Buru Energy Limited (ASX:BRU) has confirmed the Ungani Far West 1 well is set to become an important part of the company's production system, located in the Canning Basin of northwestern Australia.
This would deliver a financial benefit to Buru, and further leverage a potential positive re-rating in the share price based on an increasing crude oil price.
Ungani Far West 1 well
The Ungani Far West 1 well has been configured to allow testing of three zones, the uppermost zone which has tested oil, a middle zone which has calculated oil saturations from wireline logs, and the lower zone which has well developed vugular porosity in cores but ambiguous calculated oil saturations.
The upperzone has flowed oil and pressure data has confirmed a minimum 15 metre oil column is present.
Eric Streitberg, executive chairman, commented: “We are delighted with this result.
"The core through the dolomite reservoir has given us very valuable insights into the Ungani Dolomite reservoir characteristics.
"The actual rocks appear to have much better reservoir characteristics than originally inferred from logs, which of course has regional implications for how good the reservoir is – and once we have done a detailed analysis we will look to integrate this into our analysis of the Ungani wells."
Forward program
The forward program will include a shut-in for around one week, to be followed by further pressure surveys.
The aim of this program is to obtain further data to allow a more definitive interpretation of the oil and water interfaces in the reservoir.
At the conclusion of the shut-in and the data gathering phase the produced fluids will be reinjected into the formations they came from and the well will be suspended.
Location and interest
The well is located on an all-weather drilling pad one kilometre off the Ungani access road within Production License L21.
This is positioned 97 kilometres east of Broome and 3.3 kilometres southwest of Buru’s Ungani Oilfield in the Canning Basin of northwestern Australia.
Buru has a 50% equity interest in the well and a contributing interest of nil as the well is being drilled under the terms of the Ungani Development Funding agreement with Diamond Resources (Fitzroy) Pty Ltd.
Anderson Formation discovery
Buru has also made a new field play opening discovery in the Anderson Formation of the Ungani Far West 1 well.
Because of the well configuration, Buru currently can’t test it in this well - but it is a strong indication of the overall prospectivity of the area.
The company will be remapping the horizons at the Anderson Formation level and preparing a suite of prospects for future drilling consideration.
The Anderson targets are relatively shallow at circa 1,500 metres).
This means they can be tested with small rigs that can drill cheap wells.
Streitberg added: "This has been an excellent end to our current drilling program and we are now fully assessing the results to generate the next set of drilling targets.”
Analysis
Preliminary interpretation of the pressure data also suggests that the Ungani Far West 1 well is “seeing” the aquifer from Ungani.
This implies that this good reservoir quality is present regionally (as was also seen at Praslin) and suggests that the Ungani 3 result where poorer reservoir was seen is an anomaly. This is a very encouraging result for the other Ungani Dolomite prospects in the area.
Streitberg added: "The oil gravity at Ungani Far West is also very high and the oil quality appears to be excellent, and very similar to that recently recovered from the test of Ungani North.
"This is also encouraging for the value of these reserves."
The Anderson Formation discovery now adds further depth to an encouraging unfolding story.
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