BURU Energy has deferred its hydraulic fracturing program until 2015, citing delays in securing the required approvals, one month after New Standard Energy did the same thing.
In a broad-ranging announcement released on 14 July, the company said it had received the regulatory approvals required to proceed with its Laurel Formation tight gas pilot exploration program.
“The extensive and iterative nature of these approvals have also meant that the operational timeframes for undertaking the program have been compressed, as it was not possible to commence initial site and preparatory work until the approvals were received,” the company said.
“In light of the fact the approvals have only recently been received, it has been necessary to undertake a full review of the planned execution and timing of the program.”
The review had led Buru to plan a three-phase approach with a total estimated cost of over $40 million – half of which would be borne by Buru under the terms of its joint venture with Mitsubishi.
Buru will carry out wellsite preparation and civil works, diagnostic fracture injection tests and well conditioning at the site up until October this year, it said.
A planning, validation and optimisation phase, as well as a review of the design of the fracs so far, would take place from the same time, up until March 2015 – for the duration of the Kimberley Wet Season.
The company would then carry out the fracs from March until August 2015, with this to be followed by a three month follow back period to ensure the data obtained would allow definitive decline curves to be calculated.
Buru said Alcoa would cover its portion of the total project cost under the terms of a previously announced agreement.
The news came after New Standard Energy announced in early June that its Southern Canning joint venture with ConocoPhillips and PetroChina had decided to defer its Canning and Carnarvon basin drilling activity until 2015.
“Unfortunately delays in receiving various stakeholder approvals required for the drilling of the Brooke North 1 well have made it impossible to drill the well prior to this year’s wet season,” the company said.
The project partners had been in talks with the Western Australian state government to ensure that this delay did not delay its tenure over the permits – with New Standard Energy managing director Phil Thick saying the support received was “very positive”.
“We are now in a position where we will expect to have extra time to plan and implement our WA drilling program while retaining the upside of our considerable acreage and the support of our global partners,” he said.
The company was also finalising a renegotiation of its drilling services agreement with Enerdrill to re-schedule the drilling of its Western Australian wells until 2015.
“Both companies remain committed to the intended drilling program and have sought to renegotiate timelines rather than terminate the drilling contract, an outcome which is beneficial to both parties,” the company said.