Buru Energy Limited (ASX:BRU) (OTCMKTS:BRNGF) (FRA:BUD) is fully funded to progress its 2021 exploration program in the Canning Basin with the successful completion of a share purchase plan (SPP).
The SPP received subscription applications totalling $1,019,000 from 133 shareholders resulting in the issue of 6,368,750 new shares at the issue price of $0.16.
The SPP provided eligible Buru shareholders with the opportunity to acquire up to $30,000 worth of new Buru shares.
The amount raised was within the maximum amount and will not be subject to scaleback.
“Fully funded for 2021 Canning Basin exploration”
The funds raised will add to the company’s recent successful $15 million share placement to institutional, professional and sophisticated investors.
Buru Energy executive chairman Eric Streitberg said: “Buru welcomes the support of its new and existing shareholders to enable us to raise a total of some $16 million through the share placement and subsequent SPP.
“We are now fully funded for our 2021 Canning Basin exploration and development program, with the first exploration well at the Currajong prospect scheduled to spud next week.”
The Ensign 963 drilling rig is currently being mobilised to the Currajong 1 well site in Western Australia.
Currajong 1 Well
The Currajong 1 structure is expected to be at a similar depth to the Ungani Oilfield at some 2,400 metres and the company anticipates it will have similar seismic characteristics at the reservoir level.
The oil quality is also expected to be similar to Ungani at around 37 deg API and generally sold at a premium to Brent.
Site preparations at Currajong were recently completed, and the well is expected to spud in mid-June and take some 21 days to drill.
The company also expects to begin a seismic program comprising 1,100 kilometres in late June as crew becomes available from current Perth Basin contract.
Under the terms of Farm In agreements executed in December last year with Origin Energy Ltd (ASX:ORG) (OTCMKTS:OGFGY), Buru is being carried for $16 million of the costs of the two exploration wells and for $6 million of the costs of the planned seismic program.
Drilling planned at Rafael 1
Drilling at Rafael 1 will follow once the drilling at Currajong 1 is complete with the access road completed and final wellsite works, including the installation of impermeable liners, set to commence shortly.
The large size of the Rafael structure means that at the exploration stage 2D seismic data is sufficient to provide confidence on the drilling location.
However, under the terms of the Farm In agreement for the Rafael well, Origin will also fund the first $4 million of a 3D seismic survey if the well is successful.
The principal reservoir section is expected to be encountered below 3,000 metres with the total depth of the well up to 3,800 metres and modelling of geothermal gradients and source rock composition gives the company confidence that oil is likely to be the dominant hydrocarbon phase.
The Rafael well is expected to be spudded in late July or early August.