Buru Energy Raises Capital for Ambitious Exploration Plans

Buru Energy has completed a $50 million institutional placement to help fund a massive oil and gas exploration program in the Kimberley, the West Australian has reported.

Investor interest from Australia and overseas in the raising was strong, buoyed by Ungani and the shale gas potential of Buru's Canning Basin acreage that earlier attracted Mitsubishi Corp, the report said.

Mitsubishi is funding 80 per cent of a $100 million exploration program for Buru, which had $17.3 million cash at March 31.

The Ungani oil field is tipped to contain up to 20 million barrels, which many analysts say is sufficient to underpin Buru's current market value, while the company says its Canning Basin acreage also had the potential to contain 20 trillion cubic feet of gas.

The second well of the Buru- Mitsubishi alliance, Paradise-1, has struck gas amid expectation it had intersected the same accumulation as the earlier successful well, Valhalla. Buru has said the Valhalla accumulation could contain 6.5tcf and 187 million barrels of liquids.

The newspaper added that Buru expects to use some of the freshly raised cash to advance development of Valhalla as well as the Yullerroo field, which contains an estimated 332 billion cubic feet of gas and 13.4 million barrels of liquids.