Buru Energy Limited provides the following weekly update on drilling operations at the Valhalla-2 well as at 06:00hrs, 21 July 2011 (AWST).

The Valhalla-2 well is the first well in the Buru - Mitsubishi Corporation ('MC') 2011 Joint Exploration Program. Buru and MC each have a 50% interest in this well and in EP 371, with MC contributing 80% of the cost of the well under the terms of its farm-in agreement with Buru.

Since the last progress report the well has been drilled ahead in 8½' hole from 2,789m to a total depth of 3,390m (3,333m TVDRT). The Lower Laurel gas sands were penetrated as prognosed.

The continuous high levels of background gas observed in the previous section have continued throughout this section with good to excellent gas shows. Gas influxes were flared during the drilling of this section, and on reaching total depth, with gas being flared on an intermittent basis for periods of up to two hours. It is not certain at this time which sections of the well have contributed to these gas influxes. Given the nature of the drilling process no stabilised flow rate has been established from this or the numerous flows over the previous week. It should be noted that mud gas analysis indicates high proportions of C2 to C4 components, indicative of 'wet' gas.

Tags: Buru Energy