Maiden reserves on horizon for Real Energy as gas sales interest heats up

Real Energy Corporation ASX RLE Windorah gas project Tamarama flare
Real Energy is on track to book maiden reserves at its Windorah gas project in the "near-term".

Gas sales interest is ramping up for the Windorah gas project in Queensland as operator Real Energy (ASX: RLE) edges closer to booking maiden reserves.

The company’s wholly-owned project in the south west of the state has been estimated to hold 13.7 trillion cubic feet of gross prospective gas-in-place resources.

The Cooper Basin-focused explorer has been planning to convert a portion of its contingent resources to reserves for some time and today said it was well-placed to book these in the “near-term”.

Following successful flow testing, Real Energy recently shut-in its Tamarama-2 and Tamarama-3 wells to undertake pressure build-up surveys.

In today’s operations update, the company said it was continuing to gather data and other reservoir parameters, and the wells appeared to be performing well.

Meanwhile, Real Energy said it has received strong interest from several commercial buyers regarding the potential sale of Windorah gas. The company has now called for formal expressions of interest to sell up to 5 petajoules of gas over a three-year period.

“Our Windorah gas project is very much on track with a number of commercial developments progressing concurrently,” Real Energy managing director Scott Brown said.

The company already has a memorandum of understanding with Weston Energy to supply about 3PJ of gas per annum over a five-year period.

Pipeline funding

Late last year, Real Energy inked binding deals with Santos (ASX: STO) and Beach Energy (ASX: BPT) to link Windorah with the gas majors’ gas gathering network in the Cooper Basin.

In late January, it lodged an application for a pipeline licence to tie-in its Tamarama wells to Santos’ Mount Howitt facility.

Mr Brown said while industry interest for gas sales was growing, the company is also seeing “significant interest” from a number of groups to provide funding to build the pipeline.

“Real Energy is in discussions with groups interested in providing debt finance in respect to some or all of the expenditure required for the pipeline and associated infrastructure,” the company stated in today’s update.

Real Energy shares were up 11.11% to $0.11 on the news by early afternoon trade.

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