Buru Energy (ASX:BRU) has entered into a transformational transaction with its joint venture partner on its exploration and production assets in the Canning Basin in Western Australia.
The deal is an asset swap to allow each company to achieve their corporate objectives by focusing on the areas where they have the most appropriate technical and commercial capability.
Buru gains access to 100% of the cash flow from the Ungani Oilfield where production will shortly recommence, together with 100% of the highly prospective exploration permits covering the Ungani oil trend, and continued exposure to the Laurel Tight Gas accumulation.
In return, it gives joint venture partners, Mitsubishi full access to the EP 371 (Valhalla) gas resources with the ability to progress the appraisal of the resource in a timeframe and commercial structure most suitable for them.
Eric Streitberg, chairman, commented: “This transaction is a logical outcome of the work the joint venture has undertaken in the Canning Basin since 2010.
“We have enjoyed an excellent working relationship with Mitsubishi and we will continue to be engaged with them both through our assistance with the EP 371 operations, and our continued joint venture interest in EP 457 and EP 458.
“This transaction provides both Buru and Mitsubishi the ability to achieve their corporate objectives by progressing their respective projects without the corporate and commercial boundaries currently in place under the existing joint venture arrangements.”
Updates will be provided at the company’s upcoming annual general meeting on 31 May.
Transaction details
Buru, DRC and DRF have entered into an agreement having the following effect:
- DRF has agreed to transfer to Buru its 50% interest in the Ungani Oilfield Production licences (L20 and L21) and its 50% interest in exploration permits EP391, EP431 and EP436;
- DRC has agreed to transfer to Buru its 50% interest in exploration permit EP428;
- Buru has agreed to transfer to DRF, its 50% interest in EP 371 and its 50% interest in the application for special prospecting authority STP-SPA-0065 and STP-AAA-0031 (SPA); and
- DRF and DRC have also agreed that Buru will provide services in relation to EP371, including community engagement and liaison.