Real Energy (ASX: RLE), has executed a non-binding memorandum of understanding (MOU) with Weston Energy Pty Limited to sell gas from the company’s Windorah Gas Project in the Cooper Basin, Queensland.
- MOU covers sale of gas to Weston Energy from the Windorah Gas Project – with Weston Energy becoming Real Energy’s foundation customer.
- Real Energy to receive funding of A$6 million via a gas prepayment.
- Key terms agreed on purchase of 3 petajoules of gas per year for a five-year term and allows RLE to covert resources into reserves.
- MOU represents key step towards commercialisation of the Windorah Gas Project following recent signing of MOU with Santos Limited (ASX: STO) for gas processing.
The MOU represents a significant step towards signing a binding gas sales agreement between the two parties and covers the purchasing by Weston Energy of 3 petajoules gas per year for a period of five years. A future binding agreement is subject to a number of conditions, including Weston Energy finalising gas transportation arrangements.
The MOU also provides for Weston Energy making a prepayment of A$6 million, which will give Real Energy additional financial flexibility to execute future field development activities.
The MOU also allows the Company to convert its 2C and 3C resources into reserves. An independent petroleum engineering firm has assessed the 3C gas resources of the Project at 672 Billion cubic feet of gas.
Scott Brown, Managing Director of Real Energy commented:
“We are delighted to have executed this MOU with Weston Energy, who will become our foundation customer for the Windorah Gas Project.
Real Energy is continuing to make significant progress towards the commercialisation of the Windorah Gas Project, in what is a transformational period for the Company. The signing of Weston Energy as our foundation customer follows the signing of an MOU with Santos for Windorah’s gas processing – both are significant and impactful developments for the business.
We are pleased to be part of the broader gas supply solution that delivers certainty and dependable energy supply to the Australian industry, and we look forward to providing further updates on additional gas sales agreements.”
Garbis Simonian, Managing Director of Weston Energy added:
“Our aim is to support Australian domestic businesses and jobs, and this MOU with Real Energy is a significant step in delivering competitively priced contract gas to our industrial and commercial gas customers on the East Coast of Australia.”