Buru Energy has boosted its Ungani oil field’s 2C Contingent Resources by around 200%, lifting recoverable oil estimates to 660,000 barrels while exploring new, lower-cost production and local refining options.
- Ungani 2C Contingent Resources rise from 220,000 to 660,000 barrels
- Shift from trucking to micro-refinery could slash operating costs
- Reservoir modelling predicts several years of plateau production post-restart
- Field has been under care and maintenance since August 2023
- Offtake options being reassessed to improve product pricing
Significant Resource Upgrade at Ungani Oil Field
Buru Energy (ASX:BRU) has announced a striking increase in the estimated remaining recoverable oil at its wholly owned Ungani oil field in Western Australia’s Canning Basin. The 2C Contingent Resources, classified under the Petroleum Resources Management System, have surged by approximately 200%; from 220,000 barrels to 660,000 barrels. This uplift reflects fresh reservoir modelling and a reassessment of production strategies following a period of care and maintenance since August 2023.
Rethinking Production to Unlock Value
Historically, Ungani operated with Electric Submersible Pumps (ESP) and re-injected produced water, trucking crude over 1,000 kilometres to Wyndham for export to Asian refineries priced against Brent crude. This logistics-heavy approach contributed to operating costs where transport alone accounted for more than half the expenses.
Buru is now evaluating alternative restart scenarios aimed at reducing these costs and enhancing product pricing. Among the options under consideration is establishing a micro-refinery to convert Ungani crude locally into diesel and other products for the Kimberley region, potentially capturing higher margins and bolstering regional energy security.
Reservoir Dynamics Point to Sustained Production
Reservoir simulation by an independent engineer indicates that following restart, the field should experience a flush of production as water coning relaxes and oil-water contact re-equilibrates; a phenomenon observed in Ungani’s production history and analogous reservoirs. Careful management of this phase could support several years of plateau production, enhancing the field’s economic profile.
The resource increase is contingent on successfully maturing commercial restart plans and securing offtake agreements. Buru’s Executive Chair David Maxwell emphasised the strategic value of this uplift amid growing local energy security concerns, highlighting the potential for cost reductions and market diversification through new operating models.
Strategic Implications and Next Steps
This upgrade arrives as Buru simultaneously advances its Rafael Gas Project, having recently secured funding and progressed environmental approvals, underscoring a multi-pronged approach to resource development. The company’s exploration of a micro-refinery aligns with feasibility work underway for Ungani’s restart and reflects a broader pivot toward value-added processing.
Investors will be watching how Buru navigates the commercialisation of these contingent resources, including finalising offtake options and operational plans. The transition from a high-cost trucking model to local refining could materially shift Ungani’s cost structure and revenue profile.
Bottom Line?
Buru’s resource upgrade at Ungani coupled with cost-saving production shifts could reshape its regional energy footprint, but commercialisation hurdles remain.
Questions in the middle?
- How will Buru finalise offtake agreements to capitalise on the increased contingent resources?
- What are the technical and financial feasibility outcomes of the proposed micro-refinery?
- How will reservoir performance post-restart align with the predicted plateau production phase?