Buru Energy Advances Rafael Gas Project and Strengthens Kimberley Regional Energy Security

Partnership Structure and Local Energy Supply Potential at Rafael Gas Project

Buru Energy is progressing the Rafael Gas Project in partnership with Clean Energy Fuels Australia (CEFA), part of the Octa Group, under an operational model that separates resource ownership and facility management. Buru retains ownership of the Rafael gas resources and manages subsurface operations, while CEFA constructs, owns, and operates processing, storage, and loadout facilities. Buru pays CEFA a recurring tariff for processing Rafael gas and liquids, creating a service-based revenue model that maintains Buru’s equity while leveraging CEFA’s expertise in remote energy infrastructure.

The Rafael project is strategically positioned to fill a critical supply gap in the Kimberley region, where all LNG, diesel, and LPG are currently imported from distant locations such as Karratha, Darwin, Kwinana, or overseas. Rafael aims to supply competitively priced local fuels to meet part of regional demand, substantially reducing transport distances. This positions Buru as a leading local energy supplier for LNG, diesel, and LPG across the greater Kimberley market, underpinning regional energy self-sufficiency.

LNG Marketing Strategy Targeting Kimberley Power and Mining Sectors

Buru Energy is formulating a targeted LNG marketing approach focused on supplying Kimberley power generation, minerals processing, and mining operations. Four of the five main Kimberley electricity demand centres—Broome, Derby, Camballin/Looma, Fitzroy Crossing, and Halls Creek—currently rely on LNG imported from Karratha. This established infrastructure and demand provide a solid foundation for Rafael LNG supply, with product specifications and delivery requirements well defined. The Rafael LNG plant is engineered to deliver three high-value product streams, with planned production of up to 300 tonnes per day of LNG from two wells producing up to 14 terajoules per day of gas.

The economics of LNG supply from Rafael are compelling. Presently, regional gas-fired power stations receive LNG transported over 615 to 1,520 kilometres, with delivered costs benchmarked at A$22 per gigajoule per the Broome Clean Energy Study (February 2023). Rafael’s proximity to Kimberley markets significantly reduces transport distances and costs, offering a competitive advantage to serve four major population and industrial centres. Current economics are based on 200 tonnes per day LNG production, with plant capacity allowing expansion to 250300 tonnes per day, presenting substantial low-cost growth opportunities as demand increases.

Diesel and LPG Market Research Supports Commercial Strategy

During the June 2026 quarter, Buru Energy initiated market studies for Rafael liquids and LPG to guide optimal marketing strategies. The Kimberley market for diesel and LPG substantially exceeds Rafael’s planned production volumes, indicating significant demand and market penetration potential. Diesel consumption covers power generation in over 100 remote communities, industrial activities, transport, and agriculture. Pricing typically aligns with posted terminal gate prices, with the Broome Terminal Gate Price serving as a benchmark for imported diesel, adjusted for transport and markups.

LPG offers a complementary revenue stream, currently sourced from Kwinana and Darwin via road transport. LPG prices are generally unregulated and benchmarked to international indices such as the Saudi Aramco Contract Price, with freight and logistics markups applied. Local LPG production at Rafael can provide pricing advantages by eliminating transport costs and improving supply chain efficiency. The recent liquids analysis enables Buru to quantify these cost benefits and develop targeted marketing for diesel and LPG, enhancing the project’s commercial viability and revenue forecasts.

Economic Screening Highlights Strong Returns and Cash Flow Potential

Buru Energy’s economic screening for the Rafael Gas Project reveals strong financial returns across multiple commercial scenarios. The project exhibits a 4280% IRR depending on the commercial model, based on P90 resource estimates alone. Importantly, average pre-tax annual cash flow is projected to exceed three times Buru’s current market capitalisation, indicating substantial long-term shareholder value. These ungeared 2026 dollar economics include provisions for facilities, well capital expenditure, and abandonment reserves.

Value drivers extend beyond LNG production to include diesel and LPG contributions, which significantly enhance overall returns. The company identifies low-cost growth opportunities post-project foundation, including scaling LNG production from 200 to 250300 tonnes per day, utilising the larger P50 resource (2.5 times the P90 resource), and exploration upside at the Flying Fox prospect. Additionally, Buru holds over A$200 million in tax losses available to offset future profits, further boosting project cash flow.

Environmental Approvals and Traditional Owner Agreements Progressing as Planned

Buru Energy continues advancing environmental and regulatory approvals critical to the Rafael Gas Project’s final investment decision. Studies and referral documentation for submission to the Western Australia Environmental Protection Authority (EPA) are progressing, with the final referral expected within months. This EPA referral is the primary environmental approval underpinning the project’s baseline environmental management framework.

Simultaneously, negotiations with Traditional Owners are ongoing, targeting agreement finalisation by December 2026. These agreements are essential for project development and community alignment. Secondary approvals for construction and operations will follow the EPA referral. Current timelines indicate methodical progress through the regulatory process.

2027 Rafael Drilling Programme Planned with Partner Funding Sought

Buru Energy is advancing subsurface development plans for Rafael, focusing on a drilling programme scheduled for 2027. The plan involves two production wells, Rafael 1 and Rafael 2H, designed to deliver up to 14 terajoules per day of gas to produce up to 300 tonnes per day of LNG with associated liquids. The drilling aims to complete and flow test wells to de-risk subsurface development and validate resource deliverability assumptions.

During the quarter, planning continued with well illustrations prepared to guide detailed engineering. Critically, Buru is actively seeking an investment partner to co-fund the capital-intensive 2027 drilling programme. This approach aligns with Buru’s goal to preserve maximum equity in Rafael while securing necessary capital. Successful completion of the drilling programme is a pivotal milestone toward production and cash flow generation.

Ungani Field Restart Feasibility and Micro-Refinery Potential

Buru Energy is assessing the technical and commercial feasibility of restarting the Ungani field as part of its Kimberley energy security strategy. Studies include evaluating the potential for an on-site micro-refinery, which could process crude oil or intermediate hydrocarbons into refined products such as diesel, complementing Rafael’s liquids production and enhancing regional fuel self-sufficiency.

The Ungani restart represents a strategic expansion of Buru’s onshore Canning Basin assets contributing to regional energy security. Alongside Yulleroo and Rafael, Ungani offers potential for significant value growth. Combining Rafael’s gas-to-liquids production with Ungani’s oil processing and micro-refinery capabilities positions Buru as an integrated local energy provider, diversifying revenue streams and strengthening competitiveness against imported fuels.

Mars Prospect Farm-Out Negotiations Support Portfolio Diversification

Buru Energy is progressing farm-out negotiations for the Mars prospect to leverage its exploration portfolio for funding development activities and reduce capital requirements. While specific terms and timelines were not disclosed, farm-out agreements typically involve transferring working interests to third parties in exchange for exploration and development funding, alleviating Buru’s capital burden and accelerating prospect maturation.

This initiative complements Buru’s capital management strategy focused on preserving Rafael equity while accessing external funding. Monetising exploration interests via farm-outs enables capital allocation toward critical Rafael development phases, including the 2027 drilling programme and environmental approvals. This balanced approach maximizes resource deployment to high-return projects while safeguarding shareholder value.

Yulleroo EPA Recommendation and Valhalla Gas Field Approval Progress

Buru Energy’s Yulleroo asset achieved a significant regulatory milestone with the Environmental Protection Authority recommending approval for the nearby Valhalla gas field during the June 2026 quarter. This positive EPA recommendation signals regulatory support for gas development in the Yulleroo region. Although Buru’s specific interest or role in Valhalla was not detailed, the development enhances the regulatory environment for Yulleroo and related projects.

The Yulleroo asset and Valhalla EPA recommendation reinforce Buru’s strategic position in the onshore Canning Basin as a regional energy supplier. The portfolio offers substantial value growth potential and underpins regional energy security. Regulatory momentum from Valhalla’s approval supports Buru’s goal to establish itself as a key Kimberley energy provider.

Capital Placement Raises A$5.3 Million to Support Project Development

During the June 2026 quarter, Buru Energy completed a successful capital placement raising A$5.3 million to fund ongoing project development activities. This milestone reflects management’s focus on capital preservation and strategic deployment. The funds support critical near-term tasks including environmental approval documentation, Traditional Owner negotiations, liquids marketing studies, and 2027 drilling programme planning.

Executive Chair David Maxwell stated that funding efforts are progressing well with an emphasis on preserving equity in Rafael. The company’s strategy includes securing an investment partner for the 2027 drilling programme and advancing Mars farm-out negotiations, reflecting a diversified funding approach to accelerate project milestones while minimizing equity dilution.