Buru Energy Limited (ASX:BRU) achieved a stronger than expected test oil flow from the Reeves interval of Ungani Far West 1 well in WA’s Canning Basin with initial test flow rates of approximately 270 barrels of oil per day.
The results have regional implications, validating the Reeves as a new regional target.
The zone was identified following the drilling in late 2015/early 2016 of the Ungani Far West 1 well to test an Ungani Dolomite target about 3.3 kilometres to the east of the Ungani Oilfield.
The well was a discovery at the Ungani Dolomite level at about 2,400 metres depth and was completed for production from that level.
A potential oil pool was also encountered in a shallower sandstone horizon (Reeves Formation) at about 1,500 metres depth which was interpreted as a potential future producing horizon and this test has now confirmed the production potential of that zone.
Rate exceeds expectations
After removal of the existing completion with Buru’s jacking platform, the interval 1562.5 metres to 1565.5 metres over the interpreted Reeves oil zone was perforated and a single zone completion string was run into the well with the jacking platform.
Subsequently, the well was put on beam pump and after clean-up, the well was produced at up to 270 barrels of oil per day (bopd) with minimal water cuts, which was at the higher end of expectations.
The well is currently shut-in for pressure build-up to gather further reservoir information.
Notably, the recovered oil is very similar in composition to Ungani crude and the well will be put onto longer-term production once final confirmatory oil assays are completed in the coming weeks.
Ungani Oilfield production
Production from the Ungani Oilfield in the September 2020 quarter totalled about 93,000 barrels (gross) at an average daily rate over the period of about 1,010 bopd compared to the March quarter of about 112,000 barrels at ~1,230 bopd.
September quarterly production was impacted by production downtime required to install the ESP (electric submersible pump) in Ungani 7.
The Ungani Oilfield JV, of which Buru holds 50% and is the operator, is subject to a process of continuous improvement both for surface production facilities and the downhole well configurations.
Recent upgrades
Recent activity has included upgrades to instrumentation and controls and the installation of an ESP in the Ungani 7 well.
The ESP allows higher fluid rates than were possible with the beam pump that was initially installed.
The installation of the ESP with Buru’s jacking platform was undertaken by Buru personnel in a cost-effective manner, notwithstanding the fact that some issues were encountered with contractor supplied equipment that caused a number of delays to the project.
Sales
Oil sales for the quarter totalled about 146,000 barrels (gross) from two liftings.
The first lifting was completed on July 16, 2020 for a total of 74,819 barrels (gross, Buru’s share 50%) and was sold by the Buru/Roc Oil Ungani Joint Venture on a spot basis.
Buru’s 50% revenue share from the lifting was approximately A$1.6 million.
The second lifting under the new marketing agreement with BP Singapore Pte Limited (BP) was for a total of 71,038 barrels gross (Buru’s share 50%).
Buru’s share from this lifting is estimated at about A$1.6 million with the price to be finalised at the end of this month.
Further development of Ungani
The Ungani JV is undertaking technical and commercial analysis of the feasibility of further development well drilling on the Ungani Oilfield during the 2021 drilling season.
Factors being considered include rig availability and suitability, bottom hole location for the well, well design and associated long lead items, and the commercial drivers for additional wells at this stage of the field’s development.
It is anticipated a decision will be made on the program by the end of the year to allow adequate planning and approval time for a 2021 drilling program, if this is agreed by the joint venture.