- Oil and gas explorer Buru Energy (BRU) has a comfortable cash balance to weather the COVID-19 storm
- The company is joining the list of businesses dramatically slashing personnel costs through hefty salary reductions
- Still, Buru made over $5 million during the March quarter even as the price of oil nosedived
- The company said it has over $30 million cash on hand as of the end of March, which is enough to last for 13 quarters at current spending levels
- Shares in Buru Energy gained almost four per cent today to close worth 8.7 cents each
WA-based oil and gas explorer Buru Energy (BRU) claims to have enough cash in the bank to last another 13 quarters.
The company told shareholders today it has “quickly and appropriately” responded to the COVID-19 crisis and the crash in the price of oil.
In a dramatic move to save costs and turtle for the duration of the pandemic, Buru’s corporate and office staff are slashing their salaries by between 20 per cent and 75 per cent. Executive Chairman Eric Streitberg is cutting his salary by 55 per cent, with other Non-Executive Directors slicing 40 per cent off their paychecks.
These measures, according to Buru, will reduce personnel costs by more than 50 per cent.
Buru is, of course, being prudent in its field operational spending and taking a break form any non-essential expenditure.
Production, sales, and exploration
Despite the coronavirus woes and an early-January temporary shutdown of Buru’s half-owned Ungani Oilfield, the company was still able to produce roughly 88,000 barrels of oil from the project over the March quarter.
Over the first half of the quarter, Buru sold roughly 78,000 barrels at A$86 each to bag its $3.4 million half-share of the coin. The second half of the quarter, however, was when the price of oil collapsed. Buru sold 64,000 barrels at just $45 each over the second half, banking a $1.4 million half-share of the cash.
Buru operates the Ungani oilfield but the project is owned in a 50/50 joint venture with Sydney-based Roc Oil.
Still, despite the COVID-19 crisis, Buru has been carrying on with exploration activities at its wholly-owned Blina Oilfield and Yulleroo Gasfield. Each of the company’s projects is found in the Canning Basin in WA.
Of course, given the bleak circumstances in the world of energy, investors are likely most concerned about Buru’s cash position at this point in time.
The company had $30.1 million cash on hand at the end of March and burned $2.37 million over the quarter.
Still, Buru made $5.3 million from customer receipts to help offset its exploration and development costs. Thus, at this level of spending, Buru predicts it can last for another 13 quarters before needing to raise any more cash.
Buru Energy shares gained 3.57 per cent today, closing worth 8.7 cents each.