Buru Energy announced Friday that commercial oil production and cash flow generation has commenced at the Ungani oilfield in Western Australia’s onshore Canning Basin.
Production at Ungani, which is an equal joint venture between Buru Energy and Mitsubishi, is at an initial rate of 1,250 barrels of oil per day, according to Buru Energy, but the company has indicated that the production target for this oilfield will increase to 2,500 bopd, before eventually rising to 3,000 bopd. Mitsubishi has also stated that the joint venture is aiming to produce more than 5,000 bopd at Ungani "in the next few years".
The cash flow generated by Ungani will help the joint venture partners controlling the oilfield undertake a program to increase oil reserves in the basin, according to Buru Energy. As part of this program the JV has already spud Praslin-1, which is located approximately nine miles west of the Ungani oilfield. Drilling operations at Praslin-1 are expected to be completed by mid-August 2015.
Buru Energy Executive Chairman Eric Streitberg commented in a company statement:
"The cash flow from Ungani marks the next chapter in Buru Energy’s growth. Combined with our strong cash position ($41.9 million at June 30, 2015), we have the financial strength to fund our aggressive exploration program and create further growth for shareholders. We have the strong support of government and traditional owners for our programs and an extensive and diverse portfolio to drill. This is a privileged position for a company of our size."
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