Buru Energy Limited (Buru) is pleased to provide the following operations update in relation to its wholly owned hydrogen and helium business, 2H Resources. 2H Resources is an established and active explorer for natural hydrogen. Natural or 'gold' hydrogen occurs geologically in the earth, and it has been recognised as potentially a major source of hydrogen that offers significant comparative advantages in terms of cost and emissions.
2H Resources has been a first mover in the new field of natural hydrogen development drawing on both proven geological expertise and new and evolving technologies. 2H Resources has established a major presence in one of the most prospective areas in Australia for natural hydrogen and is moving quickly to evaluate these areas including commissioning an independent resource assessment that has confirmed their significant potential.
Buru's CEO Thomas Nador commented: 'I'm very pleased with the progress our 2H Resources subsidiary has made to date. We are in the value creation phase of resource development and are following a structured path to mature a highly prospective hydrogen exploration play in South Australia. Our initial hydrogen Prospective Resource assessment by RISC places the size of the opportunity in context and provides further impetus for us to be part of South Australia's rich history of developing clean energy industries, whilst generating value for our shareholders and the communities where we operate.
Background and rationale
In 2020, Buru made a strategic decision to diversify from its core oil and gas activities to pursue energy expansion and transition opportunities that leveraged Buru's competency and intellectual property. Buru's expertise in subsurface geology, exploration, appraisal and development and its demonstrated expertise in stakeholder relations, particularly with the Native Title holders of the areas in which it operates, provides it with a competitive advantage in these adjacent activities. This strategic decision was in response to what Buru observed as a major transition in the global energy landscape driven by simultaneous shifts in technological development, regulations, consumer preferences and investor sentiment. As part of this strategy, 2H Resources, currently a wholly owned subsidiary of Buru, was formed to explore for naturally occurring hydrogen (White or Gold hydrogen), together with helium exploration and development in Australia, initially funded and supported by Buru but with the objective of becoming an independent entity in due course. 2H Resources has initially focused its activity on hydrogen in South Australia where the forward looking legislative framework has led to heightened interest in exploration for both hydrogen and helium. This focus was also driven by South Australia's Hydrogen Action Plan and the National Hydrogen Strategy. 2H Resources is also actively evaluating other areas in Australia and internationally where there is potential for natural hydrogen or helium occurrences.
Current Acreage position
In February 2021, the South Australian Petroleum and Geothermal Energy Regulations were amended to declare hydrogen, hydrogen compounds and by-products from hydrogen production as regulated substances under the Petroleum and Geothermal Energy Act 2000. This provided the framework for 2H Resources and other companies to explore for naturally occurring hydrogen in South Australia. In September 2021, 2H Resources submitted applications for six Petroleum Exploration Licences (PELs) and subsequently two Gas Storage Exploration Licences (GSELs) geologically on trend with legacy natural hydrogen discoveries across the Adelaide Geosyncline in South Australia. In June 2022, 2H Resources was advised by the South Australian Department for Energy and Mining (DEM) that 2H Resources is the preferred applicant for six PELs covering approximately 29,519 sq km and the two GSELs covering approximately 5,705 sq km. These PELAs and GSELAs are close to existing pipeline and regional road and rail infrastructure. The grant of the six PELs and GSELs to 2H Resources is subject to reaching an agreement with relevant Native Title parties. 2H Resources has commenced engagement with these Native Title parties. An application for a further PEL (PELA 763) covering approximately 5,913 sq km was made in June 2022 and is currently under consideration by DEM.
Why Natural Hydrogen
Hydrogen is a versatile energy carrier, feedstock and fuel that can potentially play a key role in the structured decarbonisation of Australia's energy, transport, and industrial sectors. It is fundamental for the manufacture of ammonia, and hence fertilisers, and of methanol, used in the manufacture of many polymers. Current hydrogen production for these industrial 4 Level 2, 16 Ord St West Perth WA 6005 1800 337 330 info@buruenergy.com ABN 71 130 651 437 processes relies on natural gas as a feedstock and produces large amounts of greenhouse gases as a by-product. Natural hydrogen is generated by geological processes and can essentially be produced without carbon dioxide emissions if the produced hydrogen is used to fuel the associated production and transport activity. Geologists have been aware of the presence of natural hydrogen for many years, but the use of hydrogen as part of the transition to cleaner energy is now driving the emergence of natural hydrogen as a viable resource. Hydrogen can be stored as a gas and delivered through existing natural gas pipelines. When compressed or liquified, hydrogen can also be transported on trucks and in ships. This means hydrogen can also be exported overseas, effectively making it a tradable energy commodity. Global demand for hydrogen is increasing, with investment in hydrogen projects forecast to reach $629 billion by 20501. Australia is considered one of the most prospective locations for natural hydrogen due to its favourable geology, with natural hydrogen having been noted as essentially a curiosity in many petroleum exploration wells, including those on trend with 2H Resources acreage in South Australia, and in exploration wells in Western Australia's Canning Basin. Helium exploration and development is also a valuable part of the 2H Resources business model. Due to its comparable molecular size, helium is considered to follow similar migration pathways as hydrogen and the exploration methodology for both resources have significant overlap. Helium is critical to many applications across multiple sectors of the economy from medical, defence, space, and resources. It is used in cryogenics, lasers, medical imaging, space, diving and in the production of silicon and titanium. Although the fourth largest producer of Helium globally, Australia accounts for less than 3% of global production with only one source of produced helium at the Darwin LNG facility2.
Independent Resource Assessment of South Australian acreage
To assess the potential for natural hydrogen in the application areas held by 2H Resources in South Australia, RISC Advisory were engaged to undertake a hydrogen Prospective Resource assessment, which was concluded in January 2023 with results set out below. Because of the relatively early stages of development of the natural hydrogen industry, there is a lack of broad legislative coverage and also evaluation frameworks. Hydrocarbon resources have a well established and accepted evaluation framework known as the Petroleum Resources Management System (PRMS) which allows a consistent and reliable definition, classification and estimation of hydrocarbon (petroleum) resources. In August 2022 the Society for Petroleum Engineers Oil and Gas Reserves Committee advised that the principles of the PRMS can be extended to substances other than hydrocarbons, including the gaseous extraction of carbon dioxide, helium, and hydrogen, paving the way for 2H Resources to seek an independent external assessment of the hydrogen potential of its South Australian exploration application areas
Contact:
Thomas Nador
Chief Executive Officer
Telephone: +61 8 9215 1800
T: 1800 337 330
Email: info@buruenergy.com
BURU ENERGY LIMITED 
