Buru Energy Targets Q1 2025 Rafael Deals, Cuts $3M in Annual Costs

Rafael Project Momentum Builds

Buru Energy Limited has reported solid progress in its December 2024 quarterly update, with the Rafael Project taking centre stage. The company is on track to secure commercial agreements for gas and liquids offtake in the first quarter of 2025, a critical milestone ahead of the planned Final Investment Decision (FID) later that year. Production is scheduled to commence in the second half of 2027, positioning Buru as the sole conventional gas and liquids supplier in the Kimberley region.

Enhanced subsurface imaging techniques, including advanced seismic data processing and rock physics studies, have increased confidence in the in-place resources of the Rafael accumulation and the Ungani Dolomite reservoir. These technical advances underpin the project’s development plans and support upcoming production testing and drilling activities slated for the 2025 Kimberley operating season.

Strategic Cost Management and Portfolio Rationalisation

In parallel with project development, Buru has completed a comprehensive business review resulting in up to $3 million in annual expenditure savings. This includes a 40% reduction in headcount, cuts to director fees, and the CEO forfeiting his 2024 short-term incentive. The company is also advancing plans to divest its 2H Resources and Battmin subsidiaries in the first quarter of 2025, streamlining its focus and capital allocation towards the Rafael Project.

The divestment of 2H Resources, which holds a substantial natural hydrogen and helium exploration portfolio, and Battmin, involved in base-metal exploration, reflects a strategic pivot to concentrate on core energy assets. These moves are expected to reduce exploration commitments and operating costs significantly.

Ungani Oilfield and Regional Energy Supply

Buru continues to engage with third parties to restart oil production from the Ungani Oilfield, targeting a more economically viable production rate of 200-250 barrels of oil per day. This is a departure from previous models requiring higher throughput to justify export logistics. The company is negotiating revised commercial terms and regulatory approvals to facilitate this restart, which would provide additional revenue streams and regional energy supply security.

The Rafael Project itself aims to replace long-haul trucked or imported fuels with locally sourced liquefied natural gas (LNG) and condensate, offering a cost-competitive and lower-emission energy solution aligned with Western Australia’s energy transition goals. The project’s forecasted cash flows are expected to surpass Buru’s current market capitalisation within three years of production start-up, underscoring its transformative potential.

Financial Position and Outlook

As of December 31, 2024, Buru held $7.9 million in cash with no debt, following a $6.7 million share placement completed during the quarter. The company’s market capitalisation stood at approximately $44 million. Exploration expenditure during the quarter was primarily directed towards the Rafael Shallow well and geological studies, while care and maintenance costs related to the Ungani facility were contained.

Looking ahead, the company’s priorities include finalising commercial agreements for Rafael, advancing regulatory and land access approvals, and executing planned drilling and testing activities in 2025. The successful divestment of non-core assets will further strengthen Buru’s financial flexibility as it moves towards production.