Buru aims to capitalize on Canning basin successes

Buru Energy Ltd., Perth, is gearing up to capitalize on what it describes as a significant series of exploration successes in the onshore Canning basin of northwest Western Australia during 2011.

Buru Energy Ltd., Perth, is gearing up to capitalize on what it describes as a significant series of exploration successes in the onshore Canning basin of northwest Western Australia during 2011.

The company has interests in more than 20 contiguous exploration permits and two production permits covering virtually the whole of the Canning ‘superbasin,’ which contains a diverse number of exploration play types.

During 2011, Buru concentrated on prospects in the western sector of the region within 250 km of the coastal center of Broome.

The best result in the 2011 drilling program came in October with discovery of oil in the Ungani-1 wildcat in permit EP391a about 110 km east of Broome. The well tested a peak rate of 1,647 bo/d to make it the first onshore oil discovery in the whole of Western Australia in the last decade. The oil is a light crude with 37° gravity. No significant gas was recorded during the test.

Despite the oncoming wet season, Buru shifted the rig to drill the successful Ungani-2 appraisal, which was completed in early January. It resulted in a test flow of 1,026 b/d—45% oil and 55% water (deemed to be clean-up drilling fluid rather than formation water).

This test demonstrated the high productivity of the dolomite reservoir. It also confirmed that the Ungani structure is geologically distinct from previous discoveries in the Canning and represented a new play type in the Fitzroy Graben province.

An extended production test is planned to begin in February designed to confirm the extent of the discovery.

Buru also plans to run a 3D seismic survey over the field to help decide the placement of several more appraisal and production wells to be drilled this year. All being well the company hopes to be in a position to make a final investment decision on development in 2013.

In addition, last year’s program identified a significant and potentially extensive tight gas accumulation in the Valhalla-2 well in permit EP371 some 250 km east of Broome during July.

The well flowed gas to surface several times during drilling and intersected some 1,300 m of gas saturation. The initial analysis indicates that several tcf of gas is present in the structure, along with 50 million bbl or more of liquids. The trapping configuration implies a potential for a trap up to 16 km along the Valhalla structural nose and significant lateral extent.

More to the point, evaluation of the formation during drilling suggested it will be relatively easy to fracture stimulate to release the gas, hopefully in commercial flows.

Buru plans two more appraisal wells on the field during 2012. Depending on the results a hydraulic fracturing program will be initiated to more fully evaluate the reservoir properties.

Buru’s 2011 program also confirmed a 7-m hydrocarbon column within the Nita Carbonate reservoir in its Pictor East-1 wildcat during September. The well is in EP431 about 200 km southeast of Broome and not far from the original Pictor oil and gas find made in 1982.

No testing was carried out this time around—the 7-m column was inferred from wireline logs and pressure data—but Buru plans an appraisal during 2012, probably a horizontal well.

The 2011 program included a 185 sq km 3D seismic survey over the Yulleroo wet gas field in permit EP439 about 80 km east of Broome to gather more data about the structure and plan the location of two appraisal wells slated for this year.

Yulleroo was originally discovered back in 1967, but not appraised until 2008. This work suggested a gas accumulation potentially holding 332 bcf of gas and just over 13 million bbl of liquids. The 2012 appraisal drilling program is designed to more closely define the reserves and determine the potential for commercial development.

In one respect the success in 2011 and subsequent appraisal drilling left no time for two other wildcats—Cyrene-1 (EP438) and Paradise-1 (EP428)—originally planned for the year. These are still prospects of interest and may be included in the 2012 program.

With potential oil and liquids production as a bonus, Buru’s overall strategy remains one of proving up sufficient gas reserves in its Canning acreage to reach a final investment decision on construction of a proposed Great Northern Pipeline to transport Canning gas to markets in the southwest of Western Australia.

The company has already completed a full pre-FEED study for the proposed 400-km line to Port Hedland where gas would be sold into its existing agreement with aluminium producer Alcoa. This agreement comprises 400 petajoules of gas with an option for supply of a further 100 petajoules.

Buru still hopes to reach a final investment decision on the ambitious plan during 2013 so that first gas can begin flowing in 2014-15.

Much therefore depends on the comprehensive appraisal and exploration program planned for the company’s permits this coming year.

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