The Buru Energy Limited (ASX: BRU) share price is rising today after the company confirmed its drilling rig for the 2021 Canning Basin program and noted substantial progress on its pre-spud activity.
The Buru Energy share price is up 5.8% to 18 cents per share at the time of writing.
Buru Energy is engaged in oil and gas exploration and production in the Canning Basin in the northwest of Western Australia.
The group is divided into 3 reportable segments:
- Oil, which includes the development and production of the Ungani conventional oilfield;
- Gas; which includes exploration of gas in Valhalla/Asgard and Yulleroo areas;
- And exploration, which focuses on prospects along with the Ungani oil trend and evaluation of the other areas.
The company generates the majority of revenue through the sale of crude oil. It's partnered with blue-chip energy retailer Origin Energy Ltd (ASX: ORG) in its Canning Basin drilling sites.
Image source: Getty Images
Buru Energy's Canning Basin project
The company has confirmed the drilling rig for the three-well 2021 Canning Basin program as Ensign Rig 963. It's a sister rig to Ensign 970 currently operating at West Erregulla in the Perth Basin. Ensign is the drilling rig manufacturer.
The Ensign 963 rig most recently drilled in the Beetaloo Basin for Origin Energy, Buru's Joint Venture partner for the Canning Basin exploration program.
Buru has agreed on a letter of intent with Ensign, including a deposit for initial rig mobilisation, and the formal rig contract is being finalised. The bidding process for well services contracts has been completed, and awards are in progress.
Buru Energy investors have been closely monitoring recent news, with the company setting relatively high drilling targets and the Buru Energy share price rising accordingly.
The spud date of the first well, Kurrajong 1, is on track for early to mid-June, with site construction underway. Spud or spudding is the process of first beginning to drill a well in the oil industry.
The Buru operated Canning Basin field program is kicking off with the northern wet season drawing to a close. The program includes a three-well drilling program and an extensive 2D seismic program of some 1,100 kilometres of data acquisition.
The two-well exploration drilling program is on conventional oil prospects, which Buru Energy hopes will find "very significant prospective resources". The drilling program will also include a development well on the Ungani Oilfield.
What Buru Energy management said
Buru executive chair Eric Streitberg said it was an exciting period for Buru Energy:
We are very pleased with the way the program is coming together in what will be a very big year for Buru in the Canning. We are drilling two of the largest onshore conventional oil prospects in Australia and success will be transformational for Buru, for the Kimberley, and
for Western Australia.It is a multi faceted process to get ready to spud the first well, and we are on track and looking forward to starting work in the field and drilling some world class oil prospects.
Buru Energy share price snapshot
The Buru Energy share price has risen 95% over the past 12 months, from a low of 8 cents on 21 April. It's down slightly this week, but it's up 38% this month and 50% in 2021 to date.
