The Share Price Of BRU Zoomed By 2.439% After The Operations Update


Buru Energy Limited (ASX: BRU), a company from the energy sector dealing in oil and gas exploration and production announced its operation updates on 2 January 2019. The update highlights that the company was able to complete the oil lifting from Wyndham 1 January 2019 at 10 am. The process started on 31 December 2018 where a total of approximately 70,000 barrels of oil got lifted in the process. The pricing of the oil will depend on the Trafigura contract. 

Further to the completion of the oil lifted for December, the company also shares its 2019 program where the drilling program is expected to commence by May 2019. The drilling program for 2019 will use NewGen Drilling Pty Ltd (NGD) Rig 405 where the company has signed the contract with NewGen Drilling Pty Ltd. NGD Rig 405 is a piece of powerful equipment and is fully automatic modular rig which can drill high angle and horizontal wells. The rig can take advantage over the other equipment as it can even reach out to the remote operations in the Canning Basin.

The company also highlights its Ungani production operations updates where there is ongoing testing of the Ungani 4 well which produces hundreds of barrel of oil in a single day with a minor content of water in it.

The company was also able to clear its Alcoa debt of $2,500,000 along with interest on 28 December 2018. The outstanding liability of $5,000,000 will be paid in two equal installments each of $2,500,000 annually by the end of the calendar year 2019 and 2020. Even though the oil price remains low, the company was able to maintain its strong balance sheet with $60 million cash in excess.

Also, Buru is the 100% equity owner of EP 129 permit in the north-east region of the Canning Basin where a large straigraphic trap prospect got identified known as Butler where the EP 487 permit holders might start drilling at the prospect by 2019.

The official listing date of BRU is 01 September 2008 where the performance of the company continues to give a negative performance since the past five years. The performance of BRU in the last ten years is 17.32%. The previous one-year performance of the company is -36.92%.

The half-yearly results of BRU ending on 30 June 2018 report a net profit of $30.717 million. The balance sheet also appears healthy with a net asset base of $94.823 million and a debt-equity ratio of 0.17. The company has a total current asset of $74.219 million and a total current liabilities of $7.897 million which signifies its potential to meet the working capital needs and clear the short-term debt. Further, the half-year period reports a decrease in the accumulated losses which proves its improved operational efficiency. The total shareholder’s equity is worth $94.823 million. The net cash and the cash equivalent by the end of the period were $20.019 million.

By the end of the trading on 2 January 2019, the closing price of the share is A$0.210 with the market capitalization of $88.58 million and a PE ratio of 3.53x.


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