Buru Energy highlights toll of WA’s Cyclone Ellie

Tue 10 Jan 23, 10:41am (AEST)
A king wave gathers momentum in a stormy ocean beneath a grey cloudy sky
Source: iStock

Key Points

  • Buru shares are down -4% in the first hour of trade as company reveals toll of Cyclone Ellie
  • Buru’s key profit source, the Ungani oilfield, was shut down last week
  • Company says it has lost access to Wyndham Port via preferred haulage route, all other routes “subeconomic”

Buru Energy (ASX:BRU) advised that recent flooding from Cyclone Ellie in WA’s north has cut off access to the company’s main haulage route  on Tuesday.

Last week, the company announced that oil transport was suspended, which led it to suspend all oil production. 

Workers on-site were also removed. 

Buru’s Ungani Production Facility (UPF), 100km east of Broome, is now effectively separated from the Wyndham Port, the company confirmed on Tuesday.

The company warns alternative routes all appear “subeconomic.” It is currently engaging with relevant authorities in WA to ascertain when roads can be repaired. 

Working with government 

“In terms of our Ungani operations, we are working with the government, industry, and supply chain partners to understand what logistics options are available to us to take Ungani oil to market safely and economically,” Buru chief Thomas Nador said. 

“As an active operator in the Kimberley for over 15 years, we have witnessed the impact of weather events in the past but nothing on this scale.” 

Communities across the region have had to be evacuated as well as commercial and industrial operations. 

“Our thoughts are with the communities impacted by it and we will provide appropriate assistance as we are able,” Nador added. 

Bad start to year but cash remains strong

It’s a bad start to 2023 for Buru Energy, with its keystone profitable production asset, Ungani, now shut down and cut off. 

One year returns for Buru shareholders are down -55% as the company missed its ticket to ride the energy wave through 2022. 

Buru’s significant cash holdings are likely to be supportive as it manages any further cyclone damage. It held $18.6m in cash (as at 30 September 2022), representing just under a third of its $59m market cap. 

It only spent $285,000 over that same period, even as it supplied 76,000 barrels of oil to Southeast Asia at the time (thus the cash).

It is unclear whether or not Buru will need to pay any costs attached to remediation, as well as the start-up costs to bring the UPF back online. 

The state of Buru Energy's six month charts
The state of Buru Energy's six month charts


Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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