Buru Energy Ltd (BRNGF)

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Background

In December 2020, Origin agreed to farm into seven Canning Basin exploration permits held by Buru and Rey, to earn interests ranging from 40% to 50%. Buru remained Operator of the permits with working interests across the Basin ranging from 40% to 100%. The terms of the farmins required Origin to majority fund a two-well drilling program and the acquisition of a regional scale seismic program.

The second well in the program, Rafael 1, drilled in late 2021, was a large-scale conventional gas and condensate discovery, with an independent expert report subsequently confirming that Rafael has the potential to hold recoverable resources of over one TCF (trillion cubic feet) of high-quality gas and over 20 million barrels of condensate (light oil).

In June 2022, Origin informed Buru that it didn’t approve the funding for a proposed 3D seismic survey over the Rafael discovery. On 19 September 2022, Origin announced its intention to exit upstream exploration activities over time, including its joint venture interests with Buru in the Canning Basin, providing the flexibility to allocate capital towards its strategic priorities. Origin’s intention to exit introduced uncertainty to the timing and form of the forward appraisal and commercialisation of Rafael and added significant impetus to resolve matters.

Since the exit was announced both parties have worked to resolve matters and find agreement on commercial outcomes, including Buru proposing independent operations. Subsequent negotiations have resulted in an agreement for Origin to exit its interests and for Buru to resume control and up to 100% ownership of the permits, protecting and enhancing the long-term strategic value of the Company’s assets in the Canning Basin.