Amplitude Energy (ASX: AEL) is acquiring a 50% interest in the Artisan gas field from Beach Energy (ASX: BPT) to accelerate its East Coast Supply Project (ECSP).
The acquisition involves an upfront cash payment of $58.3 million net, plus a production royalty on Amplitude's share.
The move aims to accelerate gas production to 2028 by integrating Artisan with Amplitude's existing Offshore Otway infrastructure, alongside the ECSP development.
Integration is expected to provide cost advantages through short tie-ins to the Casino-Henry-Netherby pipeline and the use of ECSP-ordered flowlines and tee pieces.
O.G. Energy will acquire an additional 10% interest on identical terms, aligning the interests of Amplitude and O.G. at 50% each.
Production Acceleration and Infrastructure Synergy
Artisan's integration is expected to significantly increase Amplitude's equity production.
Illustratively, it could boost production by 60%, from 75 TJ/day to 120 TJ/day.
First gas from Artisan is targeted for 2028, aligning with the broader ECSP development timeline and subject to ECSP Final Investment Decision (FID) and other conditions.
Amplitude will assume operatorship of Artisan and VIC/L35 upon completion. Beach Energy will remain operator to fund and complete Artisan well works prior to completion, which is conditioned on subsea tree completion.
Financial Implications and Deal Terms
The upfront cash payment for Amplitude is $58.3 million net, which the company states will be funded from existing sources.
A production royalty of $3.75/GJ (nominal) applies to Amplitude's share, capped at 31 PJ net (or 62 PJ gross).
This transaction is expected to be NAV accretive and earnings accretive from the commencement of production.
Amplitude is targeting retention of a strong balance sheet supported by free cash generation.
Completion Conditions and Risks
Completion of the acquisition is conditional on the Artisan development well completion, which is expected in June 2026.
It also requires regulatory and customary approvals, and the ECSP Final Investment Decision (FID).
Key risks include obtaining the necessary regulatory approvals and the successful execution of the development and integration plan.
The royalty quantity cap runs until 30 June 2036, with a top-up mechanism if the cap is not reached by that date, dependent on remaining reserves.
ECSP Development and Previous Updates
Amplitude has been progressing its East Coast Supply Project, a key initiative for the company. Earlier in May 2026,
Amplitude confirmed it received production licence VIC/L37 for the discovered Annie gas field, with first gas also planned for 2028.
Foundation Gas Sales Agreements (GSAs) for the ECSP have been executed with EnergyAustralia for 30 PJ over four years and AGL for 20 PJ over four years.
These agreements are conditional on drilling results confirming minimum reserves and deliverability.
Strategic Acquisition for ECSP Growth
Amplitude Energy's acquisition of a stake in the Artisan gas field is a significant step towards accelerating its ECSP and achieving 2028 production targets.
While contingent on successful development and regulatory approvals, the integration with existing infrastructure presents a compelling case for NAV and earnings accretion.
However, previous ECSP drilling in the Offshore Otway Basin yielded mixed results.
The Elanora well was water-bearing, and an Isabella sidetrack encountered gas-bearing sands but did not support commercial development, leading to its plugging and abandonment.
This highlights the inherent exploration risks in the project.
