Old mate P. Strachan was once consistently positive on Burus worth.
Here are some valid points he raised back when Buru was a sell in 2013.
"Encouragingly, oil quality from the Ungani field is high and benchmarking indicates a price setting at about a 5% premium to Brent, equal to a Malaysian Kikeh quality, currently trading around US$114 per barrel."
"Buru was selected with an assessed valuation for its Contingent Reserves of over $4 per share. This selection carries higher risk because the petroleum resources are yet to be proven to be commercial,
but its dominant position in the Canning Basin makes buying Buru like buying Woodside in 1983, ahead of development of its North West Shelf gas assets.
Recent market wobbles as investors worry about whether the Ungani oilfield was watering out, inserted a level of risk associated with market intelligence on the stock.
Buru also faces significant funding challenges, given the billions of dollars that will
ultimately need to be spent on drilling and pipeline infrastructure to bring all of its
projects towards cash flow. However, the company has significant flexibility on the
funding front with large equity positions in project areas that provide capability for farm-out funding, while also being able to encourage build own and operate facilities by third parties for oil and gas pipeline development."
BRU Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
