Bass Oil (ASX:BAS) banks A$1.35m April as Bunian 6 prepares to spud

Cooper Basin stockpiles cleared at A$168 a barrel and the Indonesian development well could double group production

Bass Oil (ASX:BAS) just posted an April operations update that does two things at once. It shows what happens when a small producer finally gets a clean month, and it sets up a development well that could change the production base entirely.

Total April sales revenue came in at A$1.35 million net to Bass, up 245% on March. The jump was not a production miracle. It was the company finally trucking out Cooper Basin oil stocks stranded by February and March rain, sold at an average A$168.64 per barrel.

The more interesting line sits in Indonesia. The Bunian 6 development well has the rig over 90% rigged up, with spud expected by month end and first oil targeted by end of June. Management says that well alone should double group oil production. For a company currently producing around 209 barrels a day, doubling is not a rounding error.

The April revenue spike is a timing event, not a run rate

Investors looking at the 245% revenue jump need to read it correctly. Cooper Basin trucking restarted in early April once roads dried out, and the 4,537 barrels sold that month included accumulated stockpiles from the rain-affected first quarter. Oil stocks are now back to normal levels.

Underlying Cooper Basin production was 2,251 barrels for the month, averaging 75 barrels a day. Management expects this to stabilise between 85 and 90 barrels a day once Worrior and Padulla finish cleaning up. That is the real Cooper Basin run rate to model, not the April sales figure.

Bunian 6 is the catalyst that actually moves the share price

The Indonesian Tangai-Sukananti fields produced 134 barrels a day net to Bass in April at a realised US$111.45 per barrel, up 13.5% on March. Bunian 6 is being drilled as a development well in the same area, with first oil targeted by end of June. If the doubling claim plays out, group production moves from around 209 barrels a day toward 400.

We think the doubling language deserves a healthy skeptical read. Development wells in known fields are lower risk than exploration, but timing slippage and initial flow rates below expectation are common. The well still has to spud, drill, complete and tie in within roughly six weeks to hit the June target.

If it works, the economics are the story. Adding production at current Indonesian oil prices, into existing infrastructure, with no debt on the balance sheet, is exactly the kind of incremental barrel that flows largely to free cash flow.

Vanessa and Kiwi are the optionality the market is not paying for

Beyond the producing assets, Bass has lodged the bond to finalise the Vanessa gas field acquisition from Beach Energy. The asset comes with a processing facility and a 5km pipeline already tied into the Cooper Basin gas network. First gas sales are targeted by year end, which would give Bass its first east coast gas exposure into a tight domestic market.

The Kiwi field development is the longer-dated piece. A FEED study is underway with GPA Engineering, A$3.5 million in South Australian government grant funding is secured, and reprocessed Dundinna 3D seismic is showing what management describes as very encouraging results.

None of this is in the production numbers yet. For a company with a market cap that reflects its current modest output, the gas optionality and the Kiwi Triassic play are the parts of the story that could re-rate the stock if any one of them lands.

The Investors Takeaway for Bass Oil

Bass enters May with a clean Cooper Basin operation, normalised oil stocks, strong realised prices and a development well about to spud. That is a better starting position than the company has had in some time.

The single number that matters now is Bunian 6 flow rate when it comes online. If it delivers anywhere near what management is projecting, the cash generation profile of this business changes meaningfully into the second half. If it disappoints, the story reverts to a sub-100-barrel-a-day Cooper Basin producer with undeveloped gas optionality.

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