Buru Energy Ltd (ASX:BRU) has increased its cash position to $38.1 million through the sale of Yakka Munga pastoral lease and further strengthened its balance sheet through a debt restructure.
This strengthened balance sheet will allow Buru to ensure its forward gas appraisal and oil exploration program can proceed in an appropriate time frame.
Buru’s restructure of its $25 million owing to Alcoa of Australia Limited means that $12.5 million may now be repaid on or before 28 December, 2016 and if this payment is made, the final payment of $12.5 million will be due on 30 June, 2018 with no conditions, nearly two years away.
Eric Streitberg, executive chairman, commented:
“Together with the extension of the date for submission of a proposal for a domestic gas development under the State Agreement by two years to 30 June 2018, the overall package strengthens the company’s balance sheet and ensures the orderly development of its assets.
“These initiatives have been reinforced by a very substantial reduction in office overheads and field costs, and a focus on low cost solutions for future operations.”
Yakka Munga sale
Buru has received a cash payment of $9.87 million before costs from the sale of the Yakka Munga pastoral lease.
This is over $1 million more than the original contract price of $8.75 million and is for the sale of additional cattle to those in the original sales contract.
The station has been a profitable investment for the company and the access deed entered into with the new owners will ensure Buru are able to carry out all of our petroleum activities whilst maintaining a mutually beneficial relationship with the pastoral activities of the new owners.
June quarter highlights
The evaluation of the restart of the 50% owned Ungani Oilfield is nearing completion.
The evaluation has identified areas of substantial cost savings and the company is moving to restart production as soon as practicable in a commercial framework that includes an oil price that delivers strong positive cash flow.
Furthermore, analysis of data from the Laurel Formation tight gas pilot exploration program has been encouraging and substantial Contingent Resources were booked following an independent review of the Valhalla/Asgard resource.
This provides a boost for Buru who continue to progress a potentially world scale gas resource in Western Australia’s Canning Basin.
A prospectivity review of the Ungani trend for future drilling targets is proceeding well.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.