Buru Energy Ltd., Perth, agreed to acquire interests of Origin Energy Ltd. in the pair’s joint venture exploration permits in the onshore Canning basin of northwest Western Australia.
Origin will provide Buru with up to $4 million (Aus.) for a 3D survey over the Rafael gas-condensate discovery made in 2021. The program is timed for the mid-2023 operating season.
With Origin’s withdrawal, Buru will resume its position as the dominant net acreage holder and operator in the Canning region with participation in seven exploration permits, including 100% interests in EP 129, EP 391, EP 428, EP 431, and EP 436. The company holds 60% of EP 457 and EP458, which it shares with Rey Resources Ltd.
The Rafael find in EP 428 has been independently assessed to contain over 1 tcf of recoverable gas and 20 million bbl of recoverable condensate.
Origin farmed into the seven permits in December 2020 to earn interests of 40-50% while Buru remained operator with 40-100% interests.
The farm-in deal required Origin to majority fund a two-well drilling program as well as a regional seismic program. Rafael-1 was the second well in the program. In June 2022, however, Origin declined to approve funding for seismic work over the discovery.
In September 2022, Origin informed Buru of its intention to withdraw from all upstream exploration activities in Australia, including the JV with Buru in EP 428, a move Buru said introduced uncertainty to the timing and form of the Rafael appraisal and commercialization program. Subsequent negotiations led to the new deal.
With the deal, Buru will provide Origin future capped staged contingent reimbursements of up to $34 million (Aus.), conditional on achievement of key Rafael discovery-related development and production milestones. Buru said the contingent payments reflect certain past costs and costs related to the transaction as incurred by Origin.
The transfer of titles back to Buru is expected to be complete by second-quarter 2023.
Following completion and interpretation of the planned Rafael seismic program, Buru expects to begin appraisal drilling in 2024.
