{"id":61180,"date":"2013-01-24T13:06:59","date_gmt":"2013-01-24T02:06:59","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2013\/01\/24\/buru-energy-packs-potential-in-canning-basin\/"},"modified":"2013-01-24T13:06:59","modified_gmt":"2013-01-24T02:06:59","slug":"buru-energy-packs-potential-in-canning-basin","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2013\/01\/24\/buru-energy-packs-potential-in-canning-basin\/","title":{"rendered":"Buru Energy Packs Potential in Canning Basin"},"content":{"rendered":"

\n\t– Canning Basin highly prospective
\n\t– Buru<\/span> a first mover
\n\t– Macquarie gets on board<\/strong><\/p>\n

\n\t
\n\tBy Eva Brocklehurst<\/span><\/p>\n

\n\tMid cap energy stock, Buru<\/span> Energy ((BRU<\/span>)), has entered Macquarie's sights as it strives to make a name in Western Australia's Canning Basin. Macquarie has initiated coverage on the stock with a $3 price target, offering 38% upside to the current share price. Buru<\/span> has around 17 million acres in the onshore Canning Basin, in the north west of the state, which to date has only been lightly explored. The company has adopted a systematic approach to securing what it sees as the most prospective hydrocarbon acreage, providing it with a first mover advantage.<\/p>\n

\tJP Morgan believes the Canning Basin is one of the most prospective in Australia. Buru<\/span> Energy is its top ex-100 pick as a pure play in both oil and tight wet gas.The broker says Buru<\/span> displays the greatest potential returns with upside to spot of 91%, hence a price target of $4.42 and Buy recommendation. Events on JP Morgan's 2013 watch list include extended production testing at Ungani<\/span>, which is progressing towards a full field development, and flow testing of Ungani<\/span> North-1 oil and gas columns, possibly by the end of the first half. Also, the Yulleroo-4<\/span> well is due to spud shortly and will test the thesis for the Yulleroo<\/span> tight gas resource.<\/p>\n

\n\tOver the last three years Buru<\/span> has recorded discoveries at Ungani<\/span> and Valhalla and secured a strategic funding partner in Mitsubishi. According to Macquarie, the company is targeting material production growth over the medium term, with a vision to supply around 20% of the Western Australian domestic gas market and almost its entire liquids demand. The broker is mindful that, given the isolation of the Canning Basin and limited existing infrastructure, commercialisation<\/span> of gas resources will require Buru<\/span> to develop its own route to market and this could dilute value through transport tariffs or the need to fund infrastructure.<\/p>\n

\tWith the Ungani<\/span> trend only mapped on limited 2D<\/span> seismic, considerable uncertainty also remains regarding recoverable volumes at both the Ungani<\/span> oil field and untested prospects in the region. However, Macquarie sees upside potential for core Ungani<\/span> reserves as a greater understanding of the structural boundaries is gained. Successful production tests from multiple wells will be required to confirm the commerciality of this play.<\/p>\n

\tBuru<\/span> is near the high end of the risk spectrum of mid-cap energy stocks under Macquarie's coverage. However, if the 20mmbbl upside case at Ungani<\/span> (through a 3D seismic program) can be proven, Ungani<\/span> North can be tied in as an additional discovery and further exploration success occurs at Yakka Munga and Jackaroo this year, the broker's Net Asset Value could rise by 27% to $4.05 a share from the current $3.19. Successful flow testing at Valhalla? Macquarie envisages the NAV would rise a further 5% to $4.27. 
\n\t <\/p>\n

\n\tFind out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Buru Energy is packaging a lot of oil and gas potential in the Canning Basin and Macquarie has initiated coverage.<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[24],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61180"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=61180"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61180\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=61180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=61180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=61180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}