Buru Encounters Oil Shows at Ungani Far West 1 Well in Western Australia

Buru Energy Ltd. provided Thursday the following weekly update on drilling operations at the Ungani Far West 1 well in Western Australia as at 06:00 hrs, Dec. 31.

Since the last progress report, the well has been drilled ahead in 6.125 inch (156 millimeter) hole to current depth at 06:00 hrs today of 7,234 feet (2,205 meters). The well will continue to be drilled ahead to the top of the Ungani Dolomite reservoir where 5 inch (27 millimeter) casing will be run and Atlas 2 Rig will then be released. Specialist coring rig DDH1 Rig 31 will then be rigged up and conduct coring operations through the Ungani Dolomite reservoir section.

Since the last report, oil shows have been observed in cuttings sample and mud log gas readings in sandstones of the interpreted Anderson Formation over the interval 6,086 to 6,257 feet (1,855 to 1,907 meters) drill depth with the highest mud log gas readings over the interval 6,135 to 6,181 feet (1,870 to 1,884 meters).

Once section total depth (TD) is reached the significance of the shows will be investigated by wireline logs, and if considered sufficiently encouraging, by wireline pressure and sampling operations. 

The well is located on an all weather drilling pad approximately 0.62 mile (one kilometer) off the Ungani access road within Production License L21, 60 miles (97 kilometers) east of Broome and 2 miles (3.3 kilometers) southwest of Buru Energy's Ungani Oilfield in the Canning Basin of northwestern Australia.

The well is being drilled under the terms of the Ungani Development Funding agreement with Diamond Resources (Fitzroy) Pty Ltd. Equity and contributing interest for the well are as follows.

• Buru Energy: Equity Interest - 50 percent; Contributing Interest - 0 percent
• Diamond Resources (Fitzroy): Equity Interest - 50 percent; Contributing Interest - 100 percent