Vintage Energy announces first gas flows and revenue from Vali
Vintage Energy (ASX: VEN) has announced the eagerly-awaited start of gas production at its Vali field in the Cooper Basin.
The milestone also marks the first revenue generation just three years after the gas field was discovered, with the gas being supplied to eastern Australia under a long-term supply deal with energy retailer AGL Energy (ASX: AGL).
Vintage managing director Neil Gibbins said AGL’s commitment to pre-paying the joint venture $15 million under its supply deal enabled Vali to be brought online much earlier than would otherwise have been the case.
“AGL showed its willingness to step up and encourage new players with new supply; something keenly needed by the east coast gas market.”
“The long-term supply agreement with AGL was pivotal to Vintage securing the capital required to commit to the project,” he said.
The Vali field has been independently certified as having proved and probable gas reserves of 101 petajoules. Under its supply deal, AGL will offtake an estimated 9-16PJ of gas from now until the end of 2026.
Odin field’s connection advances
Vintage has refrained from contracting the bulk of Vali’s gas reserves as it builds a thorough understanding of the field’s producing reservoirs from its three existing wells.
The company believes the understanding acquired over the first six to nine months of production will inform the preparation of a full field development plan and marketing of Vali’s uncontracted gas (85PJ).
In addition, the Odin gas field about 7km west of Vali is independently certified as containing a 2C resource of about 40PJ of gas.
Work is progressing on connecting Odin to the Vali-Beckler pipeline, with an interim “accelerated connection” expected for the third quarter of calendar 2023.
Vintage operates the ATP 2021 permit, containing the Vali field, with a 50% interest in joint venture while fellow ASX-listed junior Metgasco (ASX: MEL) and private company Bridgeport (Cooper Basin) Pty Ltd each hold 25% stakes.
Mr Gibbins gave recognition to the persistence of its employees and contractors, which enabled the project to progress in the face of obstacles and disruption brought by COVID-19 and the consequent supply chain issues.
“For an exploration company to reach this point, let alone within four and a half years of floating, is noteworthy,” he said.
Mr Gibbins also thanked the Queensland and South Australian governments for their support of the project and its integration into the Moomba gas gathering network.
“Our expectation is Vali, and the nearby Odin gas field, will be supplying gas to eastern Australia for many years.”
“The facilities installed for these first flows will be an initial production solution on full field development in the coming years,” he added.