Buru Energy Limited (BRU) Earnings Call Transcript & Summary

Well, ladies and gentlemen, it's 10:30 and time for the formal business to commence. My name is Eric Streitberg. I'm the Chair of Buru Energy. I'm very pleased to welcome everybody. Thank you all for making the effort to come into the AGM and hopefully, you ran the gauntlet okay, now at the front. They were very polite, but still, there's a message there. Our Independent Non-Executive Directors are also joining us: Rob Willes, who you all know; Malcolm King; and Jo Williams on the end there. Our Company Secretary, Paul Bird, has done all the hard yards to get us to this point. And he's here to ask any -- answer any questions about the conduct of the meeting. We also have the company's auditors here and in case we have any questions on the accounts. We are also holding a hybrid meeting this year, where shareholders can attend physically here at The Celtic Club as you all obviously have and also virtually via the online details that were provided with the Notice of Meeting. Paul and I know we have -- do we know how many people are actually joining us online? Is that...

About 41.

We have another 41 people joining us online. So welcome to everybody who's joining us online. Very pleased that you've been able to join us. As we set out in the Notice of Meeting, shareholders listening via the webcast should be able to view the slides presented during the meeting and vote on the resolutions and ask questions in relation to the business of the AGM, and I'll explain this again in more detail during the meeting for each of the resolutions. Detailed instructions are also in the Virtual Meeting Online Guide that was attached to the Notice of Meeting. So obviously, the people who are online must have read that. So they should be able to ask us questions. After the meeting, formal business of the meeting, our CEO, Thomas Nador, who I neglected to introduce, welcome, Thomas, will provide a short presentation on the operations of the company, and there will be a good opportunity then to both ask questions from the floor and then obviously, the Board and Thomas will be around after the meeting and very happy to answer any questions. And I know a lot of people prefer a one-on-one rather than asking from the floor. I'll now move on to the formal part of the meeting. So with the time being 10:30, I declare the meeting open. But before we proceed with the formal business of the meeting, I'd just like to make a few remarks and -- about both the overall activities of Buru and also the energy sector in general. And these remarks will be in an ASX release, which I believe we've just made, so you'll be able to see my address and also Thomas' remarks in relation to his presentation in the ASX release. So look, Buru and its predecessor, ARC Energy, who I was a founding shareholder and CEO of, have operated in the Kimberley, so Buru's operated and ARC have operated in the Kimberley since 2006. So we've developed very deep connections at a community government level and continuously strive to maintain and improve those relationships. And in that regard, we also acknowledge and thank the Traditional Owners of the areas in which we operate. We deeply respect their connection to country and really do strive to ensure that our activities are a of mutual benefit and cause as little disturbance to both their way of life and to the environment. And we've developed those practices over many years to be in a position now where we can leave a very small footprint. Our other vital relationship, apart from the communities where we operate, are our staff and our CEO, Thomas Nador, has been with us now I guess, I'm counting about 1.5 years, yes. He's done a remarkable job and advancing all our projects. And it's been also achieved through the hard work of our innovative staff who deserve special recognition for their dedication and their faith in the positive outcomes for Buru and for the energy industry in general. And there's a number of our staff here today. Please feel free to talk to them, and we're a very transparent company. So I'm sure they will answer all your questions. But this dedication to the company and their faith in what we do is often tested given the very unfortunate social atmosphere that can surround the supply of the vital energy resources that support our standard of living. And of course, we were welcomed by people today who don't like what we do but are still very happy to reap the benefits of the energy resources that we're involved with. The other thing that concerns me greatly is that this social atmosphere is reflected in the declining university enrollments through the range of professions that are essential, not only for us, but also to support the future energy supply and decarbonization efforts. It's a real shame that people -- the whole STEM enrollments have declined. And I think it's something the government is going to have to work very hard on. And speaking of government, mixed messages from the government aren't helpful. On the one hand, we've finally got a recognition from the government that Australia needs the energy industry to maintain a mix of energy sources going forward. The gas industry is going to be here well through 2050. The recent AEP conference in Perth, which is the Peak Energy Conference, every government spokesperson had basically acknowledged the fact that we were going to need gas through to 2050. But then legislation doesn't help us to achieve that. And some of it's actually quite obstructive, but we're working on it. But that environment obviously has great opportunity for the company. Our gas and condensate discovery at Rafael gives us a unique opportunity to be part of that long-term energy supply system. And you may have seen there's been a lot of talk recently about domestic gas in Western Australia. Rafael will be a key part of that when it's developed. But we also need to expand our business, and we've been doing that through our complementary business streams, in particular, natural hydrogen, and that's our subsidiary, 2H Resources, which is sort of buried in the company, and we don't really see any value for it, despite the fact that separately, this -- companies with similar assets have got very substantial market caps. And we got into that industry by moving quickly and being very innovative to build up a very substantial and prospective portfolio. We've also nurtured a "company center of excellence" in Carbon Capture Utilisation and Storage, or CCUS. And that's been through our GeoVault subsidiary. And I want to pay particular thanks to Rosie Johnstone, who's tirelessly driven that project with a unique mixture of skill and passion under some fairly difficult things. I'm not singling Rosie out of our staff, particularly, but the CCUS part of it has been a real passion of hers and she's done a great job on it. Also, of course, I want to thank the Board for their essential support and counsel that's required to deliver on the company's vision. And I certainly thank them for their support for me during the year; and of course, our shareholders, their unwavering support, both for the company and for myself. Now for my situation, I've been in a leadership role in Buru since 2008 when the company was first spun out of ARC. And my basic skill set and passion is for finding and delivering resources. And the Rafael discovery has been a real highlight. We finally managed to crack the geological code for the big carbonate prospects in the basin, and there's a lot more of them sitting out there as well; and the maturation of 2H and GeoVault, which were just the initial ideas we've had, that have now turned into substantial businesses. So this is a turning point for the company, and it's actually an appropriate time for me to step back. So I informed the Board this morning that I'm planning to retire from my position as the Chairman and a Director of the company in due course. I will remain fully committed and involved in the company over the coming months while the Board's restructured to facilitate my retirement. Again, I particularly thank our shareholders for their unwavering support through some pretty tough times for both the company and for me personally, particularly some of our larger shareholders who've personally supported me very strongly. And I obviously look forward to seeing the continuing success of the company from the sidelines. So thank you for that. Thank you. I appreciate the support. I'll now move on to the formal part of the business, and you'll have to excuse me, it's fairly long-winded, unfortunately, to comply with all the ASIC and ASX requirements. The -- in regard to the conduct of the meeting, our company's auditor is represented today by Rob Gambitta, who's in the audience, and I've been advised by the Company Secretary that a quorum is present, probably you can tell by inspection. And we'll now proceed with the business of the meeting. So you should have already received see the Notice of Meeting, and I will therefore take that notice and the resolutions contained in it as read. The Notice of Meeting and the accompanying explanatory notes outline the business considered at the meeting today. The resolutions put to shareholders, as required by ASX, will be voted on by poll. So what you'll see today is what we've received in proxies before the meeting and then after the poll's taken, those results will be made public. The proxies are all very strongly in favor of all the motions I'm pleased to hear. We'll provide details of the poll on how to participate for those both physically present and those online as we get to it. So shareholders at the meeting, at the time you registered at the desk, you will have got a yellow voting card. The yellow card will be used to complete the poll. Any shareholder attending in person who has already lodged a proxy will have received a blue nonvoting card and therefore, does not need to complete the poll. Online shareholders hopefully have read their instructions and they can register to vote by clicking on the Get a Voting Card, which is both at the top and the bottom of your screens, and then follow those instructions. If you're here as a visitor, you will received a red card. And as visitor, you're obviously welcome to be here as an observer, but this is a shareholders' meeting, and you're not entitled to participate in the meeting, including speaking or voting. Online attendees that are not shareholders are also not able to ask questions or vote during the meeting. And I also remind shareholders that any questions during the meeting must specifically address the resolutions before them. For those in attendance, I would also ask that when you ask a question, could you please stand up or state your name and show your yellow or blue card. For those online, please click on the Ask a Question and submit your questions for the relevant resolution. I also note that online questions will be referenced by the name of the shareholder submitting the question. For those asking a question via the phone line, you would have contacted Link prior to the meeting to obtain a PIN as per the instructions in the Notice of Meeting, and you will have received instructions on the phone line on how to ask a question and a phone moderator will introduce you at the appropriate time. If there are a lot of questions, we'll attempt to answer as many as we can, but we may need to consolidate them as far as the answers go. Paul, do we have any questions?

No.

Okay. All right. I'll now move on to the formal business of the meeting after boring everybody with their detailed instructions, which I hope you all took notice of. I can refer shareholders to the annual report of the company, the directors' report and the auditor's report for the year ending 31 December '23. Each of these reports are included in the company's 2023 annual report, which has been tabled. There isn't a vote to be taken on the reports, but the auditor is here to answer any questions. So questions, at this point, should be specifically limited to the -- those reports for the auditor. And the remuneration report is voted on as a separate resolution. So are there any questions for the directors and the auditors in relation to those reports? Do we have any online questions in relation? Okay. Thank you. All right. I'll now turn to the resolution. So Resolution 1 is the remuneration report, which is the adoption of the remuneration report for the year ended 31 December 2023; the resolution, set out in full up on the screen and in the Notice of Meeting, and together with the number of valid proxies received. So subject to the poll, that resolution will be carried. This vote, as you will no doubt know, is advisory only and does not bind the directors of the company. But if a company's remuneration report receives an against vote of 25% or more at 2 consecutive AGMs, the Corporations Act requires a resolution must be put at the second annual general meeting that another meeting be held within 90 days. Are there any questions on this resolution? Are there any online questions? Okay. Thank you. As mentioned earlier, this resolution will be decided by poll. The next resolution, Resolution 2, I'm very pleased to put to you. It's a reelection of Malcolm King as a director. Obviously, Malcolm is not voting on this, but the other directors are able to. It's set out in full on the screen together with the details in relation to the number of valid proxies and from the look of it, you're doing okay. Malcolm's resume and experience is set out in the Notice of Meeting, and I won't go through them all again here, but Malcolm obviously brings very valuable industry skills to the -- and his corporate experience to the Board, and we certainly recommend that shareholders vote in favor of his election. Are there any questions on this resolution? Do we have any online questions? Okay. Thank you. Again, that resolution will be decided by poll, but I think there's a reasonable expectation that it will be passed. Ratification of the prior issue of shares under the placement. As you're aware, we did a placement late last year. And we now would like to receive ratification of that prior issue of shares. Listing Rule 7.4 of the ASX allows the shareholders of a listed company to approve an issue of shares after it's been made. So the placement doesn't reduce the company's capacity to issue further shares. That is, it effectively refreshes our 15% placement capacity under Listing Rule 7.1. Although, obviously, we haven't made a decision to undertake any future issue of shares, we just really need, in the current climate, to retain the flexibility to issue additional shares without having to first go to obtain shareholder approval. I think the resolution is fairly clear. Are there any questions from the meeting. Are there any questions online, Paul?

Not for Resolution 3.

No. Okay. Thank you. So that resolution will also be decided by poll at the end of the meeting. Resolution 4 is the reapproval of the company's Employee Share Option Plan, the -- known as the ESOP. The ESOP has been in place since 2010 and requires reapproval every 3 years under legislation. So it was obviously last approved at the company's 2021 AGM. Under the ESOP, the maximum number of shares that can be issued to employees is 5%. And currently, there are only 1 million options issued, which is a very small percentage. And they are at $0.23. So obviously, they're well out of the money at the moment, unfortunately. And those current options are all held by employees of the company. Any further issue of options would be under the terms of the plan and the exercise price has to be at least 150% of the 30-day VWAP, and the detailed terms of the scheme are set out in the Notice of Meeting at Schedule 2. The structure of the ESOP is similar to other companies of our size and stage of development, and I also note that I don't participate in the ESOP, nor do any of the other directors, and we'll only -- it is only directed at our employees, and we -- and I'll only be voting in regard to the proxies directed to me. The resolution's set out in full. Are there any questions on this resolution? No questions online? Thank you. All right. I'll now move on to the renewal of the proportional takeover provisions. Now I know you've all been waiting in anticipation for this motion to be put to the meeting. I'll now -- the provisions are set out in the Notice of Meeting in Schedule 3. A proportional takeover bid is a takeover bid that's sent to all shareholders in a class offering to purchase only a specified proportion of each shareholder's shares if a shareholder accepts the shareholder dispose of that specified portion and retains a balance. There are risks associated with a proportional takeover bid, and we believe those risks are inappropriate for a company of our size. So the Board believes that the proportional takeover provisions under the company's constitution provide an important protection from those risks by first requiring that shareholders approve a proportional takeover bid in order for that bid to proceed. It's a requirement of the Corporations Act and Buru's constitution that proportional takeover bid approval rules apply for a maximum of 3 years, and these revisions were last reviewed -- renewed at the 2021 AGM. So they are due for further renewal. Note that this is a special resolution because it's essentially part of the constitution of the company. So that needs at least 75% of the total votes. The resolution's set out on the screen, and I then ask for any questions on this one. Do we have anything online?

Not for that resolution.

Okay. There's no questions in relation to the resolution. We'll wait for the poll. Resolution 6 is the additional 10% placement capacity. The listing rules under the ASX allows listed companies that are not included in the ASX 300 and with, therefore, a market cap essentially equal or less than $300 million, to seek advanced approval from shareholders by way of a special resolution to provide a further 10% placement capacity in addition to the 15% capacity without subsequent shareholder approval. So we're -- as set out in the Notice of Meeting, we consider it's prudent for us to have that flexibility. And generally, this is a resolution that we've put to each meeting and it's been approved. This is, again, a special resolution and it needs 75% of the total votes. Resolution's set out in full on the screen together with the details of the resolution and the proxies. Are there any questions on this resolution? Do we have any online?

Not on this resolution.

Thank you. All right. So I think that's the end of the resolutions. So we'll now move on to take the poll. If I could ask you to have patience while we -- while our Link representative polls you. So I'll just -- while that's going around, I'll just explain...

[indiscernible]

Yes, I'll do that in a sec. I'll do it in a moment. Yes. I'll just explain the poll again just in case people haven't read their instructions. Most of the votes have already been lodged by proxy, obviously. For any online shareholders, if you've not already voted or submitted a proxy and want to submit your vote on all the resolutions, place your vote by clicking on the for, against or abstained voting buttons, and you must select either the for or against box for your vote to count. This also applies to proxyholders who hold votes at their discretion. Once you're finish voting on the resolutions, scroll down to the bottom of the box and click on the Submit Vote button. For shareholders here at The Celtic Club, please complete your votes on the yellow card. And I think we've probably completed that? Yes, apart from the Chairman. So if you'll excuse me a moment, I'll -- I can't do that. So I know these are my proxies, just hold on a moment. I don't take instruction as well as the rest of the shareholders. There we go. Thank you.

Thank you, Chairman.

All very formal. All right. So Paul, can you confirm that we've finished the polling? I think online shareholders have an extra 5 minutes. Yes. So any online shareholders who need to vote, you have 5 minutes. [Voting]

So thank you. That concludes the formal business of the meeting. And I'll now hand over to Thomas, who will provide a presentation on the operations of the company. And after that, there'll be time for questions. And as I mentioned, both the staff and the directors and Thomas will be available here for as long as needed to answer any questions one-on-one. So thank you.

Okay. Thank you, Eric, and good morning to our physical and virtual attendees. I'm pleased to stand before you today to deliver my address. Before we begin and particularly on this National Reconciliation Week, I would like to pay my respects to the Traditional Custodians across Australia. This includes: the Whadjuk people of the Noongar nation whose land we are meeting on this morning; as well as the First Nations people of the Kimberley where Buru has been operating for the last 18 years; as well as the First Nations people of the first basin, the Goldfields area and South Australia where Buru Energy has ambitions to explore for naturally occurring hydrogen and helium in the future. It is through authentic dialogue and respect that we can conduct our business on country and our continued investment in these relationships remains a priority for Buru. Our compliance statement is set out on Slide 2 for those that wish to review later. Perhaps building on comments by Eric, Buru Energy exists in a very dynamic and sometimes unpredictable energy and business ecosystem. Companies of our size, in many respect, serve as a canary in the mine for the oil and gas industry. Smaller cap companies like Buru Energy are facing increased sensitivity to external factors like market fluctuations, government policy and regulations and the public's perception of the oil and gas industry, impacting our access to capital and general investor sentiment. However, the company's small size is -- also affords it several benefits that allows us to deploy what I call a "judo versus sumo" strategy. Buru Energy is truly agile, and we can quickly adapt to changing market conditions. We can make decisions and implement changes much more swiftly compared to larger organizations. We have a closely-knit culture made up of highly skilled professionals, and we do share a common vision. We have an entrepreneurial spirit that leads to innovation, creativity and the willingness to take calculated risks, and we have a niche focus. Buru Energy has the right energy assets for today and for tomorrow. Our asset base is deliberate. We are not hedging bets. It is acknowledging that natural gas, in particular, will be a sought-after commodity for decades: that replacing oil and the products that come from oil will take considerable time; that carbon capture and storage is a key component of any realizable path to a net zero by 2050 ambition; and that natural or geological hydrogen and helium has the potential to play a significant role in the future of energy as are minerals that are needed for the energy transition. We are in the right postcode. We know the Canning Basin second to none and have invested in and have amassed deep geological knowledge over time. In addition to the hydrocarbon discoveries to date, we see a compelling running room of conventional targets in the basin, as well as carbon capture and storage potential in the Canning Basin. We have also been very deliberate as to where we are targeting hydrogen and helium exploration, both in South Australia and Western Australia, and we do have the team to deliver. Looking at our footprint in more detail, you will see that we have been rationalizing our Canning Basin permits to focus on Rafael and potential Rafael look-alikes. As such, we have been steadily high-grading our permits to deploy capital to the most prospective areas. Our focus here remains the commercialization of the Rafael conventional gas and condensate discovery via a phased development as well as the systematic exploration for conventional hydrocarbons, including in the near-term potential, the drilling of the very exciting Rafael Shallow clastic oil prospect later this year. We are also focused on the technical maturation of the carbon capture and storage areas in the basin via our GeoVault subsidiary, which is aimed at supporting not only Buru Energy's future developments in the basin but also third-party carbon dioxide emitters. Our Natural Hydrogen and Helium business, via 2H Resources, is currently focused on our South Australian Petroleum Exploration License Application areas where we continue to expedite Native Title Agreements with key Traditional Custodians prior to on-ground activity. We expect this to commence later in the second half of this year. In Western Australia, where we are readying ourselves to commence field activity in the third quarter of this year is also an important part of our portfolio. As for our Board of Directors, thank you for your stewardship during the year. And as for my team, again, thank you very much. I feel very well supported to deliver on our strategy, which is summarized on this slide. Buru Energy's Find, Enable, Develop, Evolve and Pursue strategy guides everything we do. It guides the work we do. It's designed to balance short- to medium-term returns from a hydrocarbon-focused business with longer-term energy transition and energy expansion businesses. Every activity we do, every dollar we spend, we deploy it to one of these elements. This provides absolute clarity of focus for the business. It guides our decision making as well as our resource allocation. So let's look at our year-end review. The Rafael conventional gas and condensate discovery is the crown jewel in our gas asset portfolio and commercializing this discovery remains a priority. We had a very busy 2023 and have made significant strides in front-end loading the development and de-risking Rafael resource commercialization. We have confirmed that there is a technically and commercially viable development concept for Rafael gas and condensate based on a low resource volume realization and that there are commercial pathways for mid and upside volumetric cases. We completed the Rafael 3D seismic survey and processing is continuing -- sorry, processing and interpretation will continue and further studies will continue to inform our understanding of the full resource potential. This ongoing work, partially initiated in response to feedback from third parties that participated in our appraisal and development partner selection process, meant that we had to delay the farm-out process to later in this year. And accordingly, we shifted our plans for resource appraisal for 2025. As a side note, a new basin entry for these entities, their respective strategic drivers and the level of investment required on their part to support a large-scale greenfield development requires an order of magnitude, deeper due diligence, and the work we are doing is all aimed at supporting this. I'm pleased to say that we are confident in our Rafael 1C Contingent Resource volume, and as such, we have completed pre-Front End Engineering and Design studies for a Phase 1 development. This is potentially transformative for the Kimberley insofar as providing local energy for the region for the next 2 decades. Currently, all natural gas, via LNG, and diesel is imported into the Kimberley, and so local source will provide very favorable energy security, affordability and environmental credentials as an alternative supply. The concept is based on a small-scale LNG plant situated on the Rafael 1 discovery well pad with local condensate stripping. Products will be trucked to key demand centers, including Derby, Broome, Looma-Cambalin, Fitzroy Crossing and Halls Creek as well as local mines and new developments, and will provide direct power as well as firming power for future renewables power generation. The project is targeting first gas and condensate sales in late 2027 and Buru has been working hard with key stakeholders and the government to bring this project to reality. A somewhat unexpected result of the Rafael 3D seismic survey interpretation came in the form of a clastic oil prospect, approximately 3 kilometers above the Rafael gas and condensate discovery and partially overlying that discovery. It is a large shallow closure between 800 meters and 1,200 meters deep, with a robust top seal with a prospective resource of between 3.2 million and 79 million barrels of oil and a P50 of 19 million barrels of oil. The opportunity to drill this prospect during the 2024 operating season is very exciting. And to this end, Buru Energy has completed requisite field surveys and is progressing approvals with regulator to support this time frame, as well as discussions with rig providers. We have all the materials needed for the well. It is a low-cost well. However, we see it as a prudent risk management to seek funding partners instead of going it alone. To this end, the company has commenced a farm-out process to secure funding for the well with robust interest from third parties. We are targeting the completion of a farm-out deal by the end of July, if possible. A commercial discovery at Rafael Shallow will provide strategic funding options for Rafael gas and condensate, both for its appraisal and potentially its development, so drilling this prospect in the second half of this year is a priority. Moving to our new energy subsidiaries. I'm pleased to say that we are making good progress in building the value proposition for our GeoVault business through robust independently verified subsurface work. This work validates our view of the potential of the Canning Basin for carbon capture and storage and gives us comfort that irrespective of the size of the future development in the basin, we have a pathway to carbon abatement as well as providing an option for third-party generated CO2 storage. To this end, we welcome the landmark legislation passed by the West Australian Parliament earlier in the month, establishing a CCS regulatory regime for the state. On our 2H Resources subsidiary, we continue to work on securing tenure in South Australia, which is taking longer than anticipated. However, we do expect agreement-making with key Native Title parties, which is the prerequisite to field activity to materialize later in the year. We have also been in discussions with several parties on various future commercial constructs for this subsidiary for the benefit of shareholders. The company has also had a very busy year in the commercial space. In addition to regaining Origin Energy's joint venture interests in the Canning Basin, we have done 2 deals to tidy up the portfolio, commenced 3 farm-out processes that are still active and have recently initiated a fourth in the form of Rafael Shallow. A highlight for me was the very demonstration of support of our shareholders later in the year in the form of a Share Placement and Share Purchase Plan, which, amongst other activities, helped secure our long lead items for the Rafael appraisal drilling program. So what are our priorities for the remainder of this year? As I mentioned earlier, we allocate our capital and resources to elements of our strategy with great transparency. We are getting after Rafael Shallow farm-out the potential success of which will be material for the business. We are refining our Rafael gas and condensate models to support the reengagement with third parties later in the year to secure a partner for appraisal and development. And we are continuing to build the overall value staircase of the Canning Basin. On the Enable front, we are in exclusive discussions with a third party for our Ungani Oilfield. This too is exciting as executed a deal for our L20 and L21 production license series could fundamentally shift the operating model for the oilfield and get revenues flowing again and underpin further exploration to backfill the Ungani facility. We are also progressing discussions with third parties on our 2H Resources subsidiary with a view to make that entity fully funded and value accretive for our shareholders. On the Develop front, we will pause the work on Rafael Phase 1 development engineering until such time as we have drilled Rafael Shallow and recommenced market engagement with Rafael gas and condensate parties. And on the Evolve side, we continue to incubate our new energy subsidiary businesses getting them ready, both technically and commercially, and getting them attractive for value crystallization in the future. I joined the company for its assets, and it's been a challenging year for the team. But look where we are now. We have a wholly owned potentially significant gas and condensate discovery in an area that relies on imports of energy. We fully own the only upstream E&P infrastructure in the region in the form of the Ungani Production Facility, allowing us to deal on this asset with parties that share our vision for the oil business. We have an exciting oil prospect that could provide enduring cash flow that is an order of magnitude larger than what we've seen at Ungani. And we are an early mover in the new energy businesses with a great impost -- without great impost on our capital runway. There is no see-through value for our 2H Resources business in the Buru share price as it stands. Finally, despite the challenging environment, and with your ongoing support, Buru Energy continues to show strong resilience in the market as depicted against our peer group. You have a very committed and energized Board, management team and staff to make Buru great again. And I personally thank you for your trust and support on this journey. Thank you very much for your time.

Thank you, Thomas. Thanks very much. Thomas, it's very inspiring and very thorough explanation of what we're up to. So I open the floor now for questions, including online questions. And as I said, if you don't want to ask questions from the floor, Thomas will be available after the meeting. So lady at the back.

My name is Claire McKinnon, proxy shareholder. I have a question for you. On the 17th of May, Horizon Power issued tender documents for the future power supply for West and Central Kimberley towns from 2027 onwards. The successful tenderer must be able to provide a guaranteed minimum of 80% renewable energy to Broome and Derby, the 2 largest towns and power consumers in the region. Could you please explain how this affects the Rafael Phase 1 development plans considering your documents have stated an assumption of 50% renewable energy? Thank you.

Yes. Thomas, you're on.

Thank you very much, Claire, for a very interesting question. So we've actually done the pre-FEED engineering work based on what Horizon initially indicated to us, which was 50%. And what that actually did for us is it was a real eye opener because, for example, if I look at Broome, to supply Broome with 50% renewables by 50% gas would require 70,000 solar panels, for which there's currently no land. So I think there will be a bit of a reset of expectations. It is a really good target to have 50% to 80% in these regional areas. There will be a reality check over the coming years regarding what is actually achievable. I'm very comfortable with the target of 50% right now. We have been engaging with Horizon Power for some time to come to a pragmatic longer-term solution. But at this stage, as I sit here right now, I do not see how technically, you would provide 80% renewables penetration to those major demand centers at 80% so...

So there is actually a report by [indiscernible] an energy study, [indiscernible] put here by experts. And that was [indiscernible] actually over 80% renewables in the region, so how do you recommend [indiscernible]?

Thank you very much. We have been engaging with key stakeholders, but that's very helpful, and we'll have a good look. Thank you.

Yes. We are aware of that. Yes. Thank you. Any other questions?

Good morning. My name is [ Graham Medhurst ], a shareholder of Buru. I wonder if the Board could update shareholders on the regulatory and legislative affairs that have affected our business? I'm referring in particular to the EPA framework for fracking, and also the WA, I think it was, draft legislation relating to hydrogen and CCS. Thank you.

Perhaps I can answer you, [ Graham ], in reverse order. So we do welcome the West Australian state government's recent activity. It's only 2 weeks ago that they have incorporated hydrogen into the [ Pajura ] bill. Regulations are yet to be worked out, and we are engaging with the department and providing feedback on what this might look like. As far as our activities are concerned, as it stands today, we are capable of detecting or searching for helium in the state. So our SPA license areas, both in the Perth Basin and in the Goldfields area, will initially target helium with a view to when regulations have fully come into force at the end of the year, earliest, we will be in a position to look for hydrogen legally. So we do welcome it. It's probably 3 years a bit too late. If you follow the South Australian example, but late -- better late than ever. As far as the fracking side, look, I just want to make a couple of points, and I've made this point out front as well. The last time this company actually fracked was some 9 years ago. And we have currently no plans to fracture stimulate in the country. So the moratorium came in, in 2019. Since then, there has been no clear signal from the government as to how they will balance their political, environmental, social kind of considerations to make that palatable for the public. There's a lot of education that still needs to be done if we were to go that path. But maybe just perhaps one other comment is we have -- as an organization and on the back of shareholders' support, we have got a yellow discovery, an endowment of tight gas. And I have been speaking with the government to see how we could actually unlock that value, perhaps through other means without having to turn the drill bit.

Any other specific questions from the floor? No? Well, thank you. Oh.

We've got an actual question.

Oh. Okay.

I think they've been answered by your presentation, Thomas. Could you just make a comment please?

Of course. Yes. I would just like to make a quick comment. So [ Mr. Thakakara ], I do have -- I want to acknowledge that I have received your e-mail on the 16th of May. I do respond to all of our shareholders. It might take a bit of time. Usually, it's 1 week. You have provided quite a wholesome e-mail, and I endeavor to respond to you certainly within the next 7 days. So please keep the faith, and I value your support of Buru.

Okay. All right. Okay. Well, thank you very much for your attendance. And as I said, very welcome to stay and talk to the Board and Thomas and our staff and have a cup of a tea and a biccy. Thank you.