Buru Energy to raise funds for Unangi oilfield development in Western Australia
Australian oil and gas exploration company Buru Energy is planning to raise approximately A$10.2m ($8.1m) through a one-for-five entitlement offer priced at 15 cents to fast-track the development of its Unangi oilfield in Western Australia (WA).
Under the development plan, the company will undertake the drilling of two wells in this year in order to enhance production capacity and recoverable oil resources.
Two of the company’s shareholders have confirmed their intention to take up their full entitlements for an aggregate amount of A$1.7m.
Buru Energy executive chairman Eric Streitberg said: “The company requires additional capital to undertake this development programme in a timely manner.
“Whilst there are several possible ways to access additional funding, the board considers an attractively priced rights issue as the fairest way to allow all shareholders to participate in the forward programme.”
The fundraising is part of a multi-phase development programme, which started with the beginning of production from the oilfield.
Meanwhile, the company is increasing production from the existing two wells to 1,250 barrels of oil per day (bopd).
The second phase of the programme includes installation of artificial lifts in the current producing wells, as well as adding storage tanks. This work is expected to be completed later this year.
Proceeds from the rights issue will be used to finance the third phase, which comprises drilling of two additional wells planned for the fourth quarter of this year, with an estimated cost of A$9.5m.
Once the third phase is completed, production capacity of the oilfield is expected to reach 3,000bopd.