The Buru Energy Limited (ASX: BRU) share price is charging higher today after the small-cap ASX energy share provided an operations update. At the time of writing, Buru shares have rallied 15% to 11.5 cents per share, taking the company's current market capitalisation to around $50 million.
Buru Energy is an oil and gas exploration and production company. It is focused on exploring and developing the petroleum resources of the Canning Basin in the Kimberley region of Western Australia. With this, the company holds interests in a portfolio of exploration permits covering around 5.5 million gross acres in the Canning Basin. It also has a 50% operating interest in the currently producing Ungani Oilfield.
What did Buru Energy announce?
This morning, Buru provided an operations update regarding Ungani oil sales and production. Notably, the company revealed it has been buoyed by the improving crude market, with increases in the Brent oil price during May resulting in additional revenue from the May lifting of around US$200,000.
The company also announced that the next lifting of Ungani crude from Wyndham Port, which is expected to be in mid-July, has been sold on a spot basis.
The Ungani joint venture plans to continue to sell crude on a spot basis while it reviews the potential for entering into another longer-term offtake agreement.
The received price of the July lifting will be based on the average dated Brent oil price for the month of July, less an agreed discount to reflect an increase in marine transport charges to a refinery in Asia.
Meanwhile, Ungani field production is currently 1,250 barrels of oil per day and a series of well optimisation activities have been planned.
Buru also noted that its current farm-out process is progressing well. Various parties have accessed the virtual data room and with COVID-19 restrictions easing, locally-based interested parties are now able to physically attend Buru's office to access the geophysical database.
Commenting on today's update, executive chair Eric Streitberg said:
"We are very pleased and relieved to see the firming oil price that gives us a healthier return from our oil sales. Although we are facing higher shipping charges and tightening refinery terms, there is still a good market for our particular high quality crude from Ungani.
Our strong cash position and our high quality exploration portfolio puts us in a good position to weather the current storms and it has also been very pleasing to see the share price improving. Although like many other companies our share price is still near historic lows, it is at least now reflecting a value greater than our cash position."
