Buru Energy (ASX:BRU) Executes Strategic Development Agreement with CEFA
Strategic Development Agreement
Buru Energy Limited (ASX:BRU) has entered into a Strategic Development Agreement (SDA) with Clean Energy Fuels Australia (CEFA) for the Rafael Gas Project. This agreement materially derisks the project development, setting a pathway to Final Investment Decision (FID) in late 2025 and anticipated cashflow in the second half of 2027. Under the SDA, CEFA will finance, build, own, and operate the Rafael LNG and condensate infrastructure, thereby limiting Buru’s financial exposure to upstream gas production.
Project Developments
Buru Energy plans to retest the Rafael 1 well to support independent reserves certification and recomplete it as a long-term producing well, with field work scheduled for the third quarter of 2025. Ongoing interpretation of the Rafael 3D seismic data indicates additional prospectivity near the Rafael gas and condensate field, potentially offering options beyond the foundational Rafael Gas Project.
Divestments
The company continues to divest non-core assets, targeting the completion of 2H Resources divestment in the second quarter of 2025. The divestment of Battmin has been completed, with a Sale and Purchase Agreement (SPA) executed with Sipa Resources Limited. As part of the transaction, Sipa will grant Battmin a royalty of 0.6% of the Net Smelter Return from future production, with an option to buy back the royalty for $0.6 million.
Financial Overview
As of 31 March 2025, Buru Energy has 779.4 million shares on issue, a market capitalisation of $33 million, and $5.5 million in cash with no debt. The company’s 12-month share price ranged from 3.2c to 12.5c.
Executive Comments
Thomas Z Nador, Chief Executive Officer, stated, “It has been a productive quarter for the business, focused on the structured derisking and delivery of the Rafael Gas Project. Our agreement with Clean Energy Fuels Australia (CEFA), an existing builder, owner and operator of small-scale LNG plants in Australia, and an important participant in the Western Australian domestic gas market is a demonstration of the value that strategic partnerships bring to resource developments. The agreement with CEFA is the ideal pathway for Buru to co-develop the Rafael Gas Project with the objective to generate material cashflow from the second half of 2027.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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