Great work Spec , Buru has more than 200 million in losses on...

Great work Spec ,
Buru has more than 200 million in losses on the books and cash in the bank and field assets that are not included in the losses .
There was a capital raising for 50 M that I think you may have missed .

But your point is very well made that in a sparsely explored , isolated frontier province without any infrastructure the potential to burn up money is huge .

Buru has discovered a lot of hydrocarbons mainly wet gas .
There has not been enough drilling to put much of it into reserve categories but the work they have have done clearly shows that there are huge resources in place . The gas has also been shown to be sweet with high amounts of valuable liquids .

There has also not been enough work done yet to prove the commerciality of the resource .
The trial fracc was successful but an extrapolation was used to get the potential for a full commercially fracced well .
The Canning Basin is clearly not Texas , the economics of operating there are far different .

It is a world class resource , its time will come , but it will not be next week .
It will require big amounts of capital and patience and a strong balance sheet to get to the stage of delivering gas to customers .
The market may have a zero valuation on the resource but imho the resources will be very valuable in the long term .

Not all the gas in Buru's areas needs fraccing , there are sweets spots with higher permeability , but it still needs the infrastructure .
The other players in the Basin and I am mainly thinking Mitsubishi , have to build infrastructure to develop their resource and I think they will do that .

I think possibly the reason Eric is so passionate about lifting the moratorium is that he would like to see Mitsubishi get on with things as soon as possible .

They have spent a lot of money and have a huge unconventional resource of wet gas and unlike Buru not a lot else at this stage .
I thought that the moratorium might have been a good thing for Buru because it would delay their drilling commitments .
That master chess player Eric knows better , it is holding up Mitsubishi , and we need their infrastructure to monetise the gas assets we own .

I am sure that the moratorium will be lifted in the Canning but it may take some time .
It is hurting our good Country Risk rating now and if Mitsubishi thought the ban was permanent and walked away it would be a disaster for the country .
Yes it is hurting Buru now .( I repent , I was wrong!!! )

Price and value are quite different things .
They are both driven by the same events but to much different degrees .
Spec I think you are right in that the price of BRU shares at the moment is based almost solely on the Ungany field .

A properly risked analysis of the what BURU has , comes up with a number that is a multiple of the present share price even after very conservative assumptions have been made .

The other thing that is involved in the price is investors perceptions of the business .
BRU has destroyed a lot of investors money in the past .The events did not turn out as they thought .Investors and the company got ahead of themselves and then the POO steamroller crushed the whole oil and gas industry .

If U4 was to have reservoir that was not as vuggy and fractured as U1 , U2 and Ufarwest and produced say only 300 bopd instead of the 1500 bopd expected , the market might be disappointed and pull back the price by a large percentage but it would affect the value only a very small amount .The oil would trickle out instead of gush out but it might trickle out for longer .

Generally you would expect value and price to get closer together over time if business performance is good .
I think BURU is grossly undervalued by the market and the price will get closer to intrinsic value if the good execution continues .

There will be disappointments because that is the nature of the game they are in , but there should be discoveries of new fields as well .Ungani will not just be a one off freak of nature .All the right geologic ingredients are in place for other fields in the Ungani trend .They have not been lucky yet on their Ungani trend exploration , but they will be learning more with each well .

All IMHO .