Real Energy strikes gas deal with Santos

Cooper Basin focused oil & gas exploration company, Real Energy Corporation Limited (ASX:RLE), has executed a non-binding memorandum of understanding with Santos Limited (ASX:STO).

This gas processing MOU would allow raw gas from Real Energy’s Windorah Gas Project to be processed into sales gas, which can then be supplied to the east Australian gas market.

Santos and its joint venture partners have gas processing facilities at Moomba in South Australia. Real Energy and Santos, as Operator of the Moomba gas plant, have agreed indicative terms for gas progressing and transportation services. These commercial terms are confidential and form the basis for a subsequent formal binding agreement to be executed between the parties including Santos’ joint venture partners.

Real Energy’s Board is encouraged by the terms of the MOU, which will support the economic development of the Windorah Gas Project. Real Energy has also agreed in principle to swap geological data for its wells for geological data for a nearby well drilled by Santos.

This MOU is an important step for the commercialisation of Real Energy’s Windorah Gas Project. Independent geologist has assessed that the 3C gas resource of the Project at 672 Billion cubic feet of gas.

Mr Scott Brown, Managing Director of Real Energy stated:

“The MOU provides a clear pathway to commercialisation for our gas without the need to build an expensive gas plant and other associated infrastructure.”

“Our confidence in the commercial viability of the Windorah Gas Project continues to grow given the improving flow rates occurring on the Tamarama-1 well. As well, the field has a great deal of future development capacity and we are only just starting to unlock its value.”