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Highlights
- Buru Energy Ltd ends agreements with Sabre Energy and secures new funding.
- The company will drill the Rafael Shallow 1 well, focusing on the Rafael Gas Project.
- A $6.7 million share placement supports development and restarts oil production.
Buru Energy Ltd (ASX:BRU) has recently shifted its focus following the termination of its farm-in agreements (FIAs) with Sabre Energy Pty Ltd. The company has successfully secured new funding to maintain the momentum of its operations, particularly in drilling the Rafael Shallow oil exploration well in the near term.
Thomas Nador, CEO of Buru Energy, expressed confidence in the company's resilience amid challenges stemming from a third party's failure to meet financial obligations. He stated, “Despite the challenges faced by Buru, the company continues to demonstrate resilience to safeguard its strategic objectives towards preserving and growing shareholder value.” This commitment remains evident through the strong backing from existing shareholders, new institutional and professional investors, and the company's directors.
Following the breakdown of agreements with Sabre, Buru Energy has moved quickly to secure alternative funding sources for the Rafael Shallow 1 exploration well. The company has engaged in farm-in transactions with two entities associated with long-term shareholders, successfully garnering $3 million in funding. These new agreements allow the entities to collectively earn a 25% interest in any commercial discovery and subsequent production licence, with terms mirroring the original Sabre agreement. Buru Energy will retain a 75% interest in the well and maintain full ownership of the Ungani Oilfield.
In addition to these agreements, Buru has completed an oversubscribed share placement that raised $6.7 million before costs. The placement was conducted at 6.2 cents per share and received strong interest from institutional and professional investors, alongside participation from the company's directors, subject to shareholder approval. The funds generated from this placement will be directed towards advancing the commercialization of the Rafael Gas Project, drilling the Rafael Shallow 1 well, and restarting production at the Ungani Oilfield.
Buru Energy has also finalized a drilling contract with Silver City Drilling, with the mobilization of Rig 24 currently underway. Drilling operations are anticipated to commence in October 2024, signaling a significant step forward in the company’s strategic initiatives.
The capital raised through various funding efforts is set to support the development of key assets, ensuring continued progress and positioning Buru Energy for future growth in the evolving energy landscape.
