Buru Energy has entered into a farm-out transaction via a binding letter agreement with the Origin Energy for an exploration program on the EP457 and EP458 permits. Buru’s current joint venture partner in the permits, Rey Oil and Gas Pty Ltd (Rey), has also agreed to participate in the farm-out.

The EP457 and EP458 permits lie to the south of Buru’s 100% owned exploration permits which are also subject to a separate farm-out transaction with Origin.

Transaction Highlights

• In return for funding the agreed exploration program (the Initial Work Program) as set out in detail in the attachment, Origin will earn a 40% interest in the EP457 and EP458 permits with a 20% equity interest being contributed by each of Buru and Rey. Accordingly, the post farm out equity interests in both permits will be Buru (40%), Origin (40%) and Rey (20%).
• The Initial Work Program consists of a 2D seismic acquisition survey targeting potential large-scale drilling prospects within EP457 and EP458 (Celestine seismic survey) at an approximate cost of $3 million. It is intended that the survey will be undertaken during the 2021 Canning Basin field season in conjunction with seismic surveys planned by Buru in adjacent permits.
• Origin will pay the first $3 million of expenditure towards the acquisition cost of the Celestine seismic survey with any expenditures in excess of this carry amount being paid by the parties in accordance with their participating interests (subject to Buru’s existing loan carry obligations to Rey.
• Origin has options to either withdraw or fund further activity in the permits as set out in more detail in the attachment. If fully exercised, these options require Origin to fund (on a carried basis) an additional $6 million of exploration drilling expenditure to maintain its 40% interests in these two permits.
• Buru will remain operator of the permits. 

This transaction provides the funding to significantly advance exploration on these relatively unexplored permits where the potential for several new play types has been identified on existing seismic data and by regional geological modeling. It is expected that the planned Celestine 2D seismic survey will confirm large scale targets for future drilling.

Buru’s Executive Chairman Eric Streitberg said:
“This transaction has been concluded after an extensive and competitive farm-out process that has included thorough technical and corporate due diligence, during a challenging period for all parties due to the pandemic restrictions.

The EP457 and EP458 permits have seen little modern exploration and have generally poor seismic coverage, but notwithstanding this, several high potential play types have been identified by Buru’s technical team. These plays require a modern high quality seismic grid to transform them from concepts to prospects, and the funding from Origin will allow us to acquire this seismic data in a timely and technically robust manner.

Origin are a well credentialled and experienced Australian energy company and the Joint Venture welcome their technical and financial support to unlock the potential of these permits.”

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