Read the latest on Buru's plans for fracking in the Kimberley...
By Courtney Pearson from the Australian Oil and Gas Review
June 4, 2015
HARD work is starting to pay off for WA explorer Buru Energy, which has enjoyed a year of firsts.
Not only has the company secured funding for its onshore Canning Basin exploration program and secured key native title agreements for the Ungani oilfield, but it has kicked off the campaign that it spent most of last year preparing for.
Buru Energy is starting one of its biggest exploration programs in its history in the Canning Basin in WA’s north-west, targeting a number of conventional oil prospects in the basin.
The company said it was taking a “revolutionary approach to the drilling program taking advantage of technologies developed for large scale programs on the east coast of Australia and in the USA”.
Buru Energy has spent the last year acquiring 2D and 3D seismic data, extensive prospect mapping and geological interpretation, the finalisation of native title agreements and selecting drilling rigs for the campaign.
As part of the campaign the explorer will drill up to seven wells.
“We have taken the view that the current market climate is perfect for us to get out in the field and drill some high impact conventional exploration wells,” Buru Energy executive chairman Eric Streitberg said.
“The potential of the program is very high, the targets are highly prospective, and the continuous nature of the drilling program means we will be generating drilling news flow for many months.”
Mr Streitberg said the progress at the Ungani wells, which includes the start of commercial oil production, was “a pivotal period in the growth and development of Buru”.
The company has about 45,000 square kilometres of assets in the Canning Basin with major partners in Mitsubishi Corporation and Apache.
The Ungani oilfield, about 150km east of Broome, has been the site of an extended production test for more than a year, producing more than 470,000 barrels of oil from two wells, and the subsequent trend is the site of an extensive drilling program.
Ungani was discovered in 2011 after the Ungani 1 well was drilled in EP 391 and was the first conventional onshore find in WA in 10 years.
Buru Energy edged even closer to commercial production at the Ungani field after receiving native title approval from its Traditional Owners: the result of two years’ worth of negotiations.
“This is the first Native Title Agreement for onshore oil production in the Kimberley,” Buru Energy executive chairman Eric Streitberg said at the time.
“It represents a major step forward in the environmentally and culturally appropriate resource development of the Kimberley.”
Last year the company completed a test production program at the oilfield which “outperformed expectations”.
The second phase of the test, which lasted from December 2013 to February 2015, produced 367,513bbl of oil.
Buru Energy is aiming to produce 3000bbl of oil per day from the field, with the Ungani North, Ungani 3 and Ungani FW wells “to provide additional production and/or water disposal”, the company stated.
“The development of the Ungani oil field will now process through the grant of the production license and the consent to operate,” Buru Energy stated.
“The company is well advanced in the process of procuring these approvals and has a target start date for production of mid-July.”
Buru Energy is looking into exporting the oil through Broome Port.
Furthermore, the Ungani FW, Praslin, Victory and Senagi wells have been agreed upon by the joint venture, all to be drilled within the Ungani trend as a result of mapping which identified an “extensive prospect portfolio”.
The trend, which was proved to be an extensive petroleum system by the Ungani North well, covers more than 1 million acres.
Buru Energy stated that Praslin-1 had a “high chance of success”, with all planned wells to be drilled by the end of the 2015 calendar year subject to the oil price. The first Ungani trend well will be drilled mid-June.
Buru Energy will acquire 3D seismic across the Yakka Munga to north of Ungani and over the Bickley trend to the east of Ungani, which will provide locations for the 2016 drilling program.
Meanwhile, Buru Energy announced the start of its drilling campaign by spudding the Olympic 1 well at the end of May.
The company has a 25 per cent stake in the well, which was described as “higher risk but [a] major play opener if successful”.
The well, southeast of Broome, is expected to take about 30 days to drill to 1450m total depth and is fully funded by Apache as part of a $25 million exploration program on EP 390, EP 438, EP 471 and EP 473.
“This style of prospect has seen few valid tests and will provide very valuable data on the further prospectivity of the area,” Mr Streitberg said.
“The Olympic 1 well is the first of a continuous drilling program for the remainder of the 2015 dry season and we are very excited to be back in the field with such a great program in front of us.”
Furthermore, Wright-1, Ophir-1 and Emanuel-1 are additional optional wells which will be subject to joint venture approvals and rig availability, the company stated.
During 2014 the company received approvals for its Laurel Formation tight gas pilot exploration program in the Canning Basin, which “has the potential to become the largest onshore natural gas resource in Australia” according to Buru Energy.
The company undertook a fracking program in 2010 with the Yulleroo 2 well, which successfully demonstrated the formation as a major unconventional resource.
The Laurel Formation program was approved by the Department of Mines and Petroleum around this time last year, laying the groundwork for the program to move forward.
The first phase, which involved drilling Asgard and Valhalla North, was completed late last year: the second and third phases are planned for 2015.
Phase 2 comprises planning, validation and optimisation to ensure the program is cost effective, while Phase 3 will include “mobilisation of the frac spread, undertaking the fracs, and then a flow back period of up to three months to ensure the data obtained will allow definitive decline curves to be calculated”.
Buru Energy stated that a decision on timing will be made once a review of all aspects of the fracking program is complete.