Buru Energy has announced successful new financing arrangements after a previous farm-in deal collapsed.
Buru had previously agreed to farm-in agreements that would have seen Sabre Energy earn interests in the Rafael Shallow and Ungani projects by funding exploration and development spending.
However, Sabre failed to meet its financial obligations under the Rafael Shallow deal, leading Buru to terminate both agreements.
Buru has now secured alternative funding of $3 million for the high-potential Rafael Shallow 1 exploration well from two entities associated with its long-term shareholders.
Twinsouth Holdings and Jingie Investments have entered separate farm-in transactions to collectively earn a 25 per cent interest in any commercial discovery from the well on roughly the same terms as the prior Sabre deal.
In addition to replacing the funding lost from Sabre’s withdrawal, Buru has completed an oversubscribed $6.7 million share placement with new institutional and professional investors as well as participation from its directors.
The capital raising will support drilling of Rafael Shallow 1, commencing next month using a rig contracted from Silver City Drilling, as well as progress development of the wider Rafael gas project and a potential restart of the Ungani oilfield.
Buru CEO Thomas Nador expressed satisfaction that the company has navigated the challenges created by Sabre’s failure to uphold its commitments.
“Despite the challenges faced by Buru due to a third party having failed on their commitments, the Company continues to demonstrate resilience to safeguard its strategic objectives towards preserving and growing shareholder value,” he said.
“Through the strong support of existing shareholders, new institutional and professional investors and our Directors, Buru is well placed to maintain the development momentum of its foundation Rafael gas project; the drilling of the high potential Rafael Shallow 1 oil target in the near future and work toward restarting oil production from the Ungani Oilfield.”
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