ungani + ungani north vs mc

If we use a $20NPV for oil, current MC of roughly $500M is equivalent to 25M bbls net to Buru, so equal to 50Mbbls for the JV. A few of us for some time have held strong views that Ungani alone will probably be close to this, and when combined with Ungani North, this is even more likely. In yesterday's update, as a few posters have pointed out, there is the strongest indicator yet that Buru also believe Ungani is significantly bigger than the 10Mbbls accessed by current wells. When you consider even the possibility that Ungani covers current MC,then we get some real perspective on potenital upside given Yulleroo and rest of Laurel play, the exciting Laurel sweet spots that alone look significant and won't need fraccing, etc etc.

I also think there is a strong message again that the shale plays such as Goldwyer will soon be farmed out. Twice now Eric has been specific in saying the Laurel won't be at this stage which is good news as we add value, but he left open the other tight/ shale plays. Farming out the Goldwyer for example would be a sensible strategy, and I would even welcome operatorship by an experienced shale operator in return for a large work program and hopefully a little cash. This would allow Buru to be more focussed on the strategy as described yesterday, while another party can simultaneously add additional value. I expect Mitsubishi would also be willing to farm down so that we might see something like 25 -30% remaining with each current JV partner respectively, and the incoming party gets 40 -50%. This would be an exciting development.

The potential for Buru is extraordinary, and while current market conditions across the juniors can be frustrating, it is hard to get concerned about Buru when looking at the big picture.