Buru Energy (ASX: BRU) has reported a significant upgrade to the estimated remaining recoverable oil at its onshore Ungani oil field, located in the Canning Basin — one of Australia's largest onshore sedimentary basins, which underlies much of the Kimberley region in Western Australia's north. The company said the revised estimate follows a detailed reservoir and operating review of the project.

The upgrade follows an assessment undertaken by Buru of alternative restart opportunities for the field, with three stated objectives: reducing costs, increasing the product price, and increasing the volume of remaining oil to be produced. As part of the review, reservoir model simulations evaluating various production philosophies were carried out by an independent reservoir engineer.

The Ungani oil field has been under care and maintenance since August 2023. Prior to that, the operating model was based on Electric Submersible Pumps (ESP), with produced water being re-injected. Ungani oil was then trucked more than 1,000 km to Wyndham, from where it was exported to crude oil refineries in Asia at a price based on the Brent crude marker — a long-haul logistics chain shaped by the field's remote inland location.

Once brought back into production, the field is expected to see a period of flush production as water coning around each well relaxes and the oil water contact re-equilibrates. This is a known feature of analogue reservoirs and has been confirmed in the production history at the Ungani field. Reservoir modelling predicts that careful management of this flush production at an Ungani field restart should deliver several years of plateau production from the field.

Following the reservoir and operating review, Buru estimates that the 2C Contingent Resources attributable to the Ungani oil field have increased by approximately 200%, from 220,000 bbls to 660,000 bbls, and possibly more. Under the widely used Petroleum Resources Management System (PRMS) classification, 2C contingent resources represent the best estimate of quantities potentially recoverable from known accumulations that are not yet considered commercially mature — consistent with Buru's note that recovery of these contingent oil resources remains subject to the maturation of commercial restart and offtake options.

Trucking and export costs under the previous operating model contributed more than 50% of operating costs. With those potential cost savings in mind, Buru is currently assessing market opportunities, including the establishment of a micro-refinery to process Ungani crude oil into diesel and other products to supply the greater Kimberley region, where diesel is a main fuel for transport and remote power generation and is typically transported in by road over long distances.

"The increase in the estimated Ungani 2C Contingent Resources is a significant value uplift opportunity for Buru at a time when the strategic importance of local energy security is clearly evident. Changing the operating model and significantly reducing the transport and operating cost are the objectives of our assessment of new and more valuable offtake and market options in the region – including a micro- refinery," Executive Chairman David Maxwell said.

Shares in Buru Energy (BRU) were up 16.7% to 1.4¢ following the announcement, giving the company a market capitalisation of $13.85 million.