Vintage Energy secures PURE Resources Fund backing to fast-track Odin and Vali gas output

Gas producer Vintage Energy (ASX: VEN) has received support from PURE Resources Fund for its plans to increase production at the Odin and Vali fields.

The hybrid credit fund managed by PURE Asset Management has confirmed it will take up a $551,500 equity subscription in Vintage through participation in the company’s current shortfall offer.

The PURE support brings total gross proceeds from the shortfall offer and the preceding entitlement offer to $1.15 million, with $938,452 remaining available.

Cash flow benefits

“PURE’s initiative has immediate and substantial cash flow benefits for Vintage Energy,” managing director Neil Gibbins said.

“It will enable Vintage to better concentrate its financial resources on delivery of the production uplift program, from which a significant improvement in gas sales and cash generation is being pursued.”

The production uplift program will aim to provide an increase in output of between 2.1 million standard cubic feet per day (MMscf/d) and 5.6MMscf/d from Odin and Vali, located in the Cooper Basin.

Shortfall opportunity

PURE’s commitment leaves a total of 187,690,409 shares available under the shortfall offer, which is open until 28 May.

PURE Resources Fund portfolio manager Daniel Porter said Vintage continues to scale up to more meaningful gas flows at Odin and Vali.

“With management making great strides to right-size the cost base, we see this capital program as a small outlay for a meaningful step change in revenues, putting Vintage on a firm footing into the future.”

Production uplift

Mr Gibbins said the $1m (net to Vintage) capital program offers an uplift of between 70% and 187% on current daily production rates, with cash payback of less than three months.

He also noted that the shortfall offer provided investors with the opportunity to acquire new fully paid ordinary shares in the company, free of brokerage costs, at an issue price of 0.5 cents per share.

Each new share allotted has a free attaching option exercisable at 0.9 cents and expiring on 7 March 2027.

Strong performance

News of the PURE support comes as the company released its March quarterly, reporting sales revenue of $1.2m and cash on hand of $2m as at 31 March.

“During the quarter we largely moderated natural decline in flow rates at Odin-1 and Vali-1, restored accurate metering and finalised a program to address a number of production uplift avenues across both fields,” Mr Gibbins said.

The March quarter was the third successive improvement in cash outflow, with further the company expecting the savings from its restructuring program to appear in the first quarter of FY26.