Vintage Energy eyes first gas from Vali field by mid-October

Vintage Energy ASX VEN AGL Metgasco MEL Vali gas 2022 AGL
Initial cash flow from Vali gas sales is anticipated in the first half of FY2023.

Vintage Energy (ASX: VEN) and its joint venture partners Metgasco (ASX: MEL) and Bridgeport are eyeing first gas from the Vali field in the Cooper Basin for late September or mid-October this year.

A rig has been contracted for well completions along with sourcing several capital items required for construction of the field, including pipe and plant materials.

Vintage noted there had been a delay in delivery of some plant and other items required for construction due to global supply challenges caused by COVID.

Construction is now expected to finish in September with all wells online in October and first gas later that month. Cash flow from initial Vali gas sales is expected in the first half of FY2023.

“The delay in commencement of first gas, while disappointing, represents a minor deferral in the commencement of revenue from a 100 petajoule gas field expected to produce over many years – initially through a contract with AGL to end 2026,” Vintage stated.

AGL to make final $5 million pre-payment

First gas from the Vali field is tied up in an offtake deal with AGL.

As part of the arrangement, AGL has already paid the first two of three $5 million pre-payments to fund the capital works to develop the field to production.

The joint venture is about to proceed with invoicing for the final $5 million pre-payment from AGL after executing the rig contract for the well completion campaign.

Savanna Energy Service has been contracted for Rig 68 to undertake the well completion campaign at the field, which comprises completion of Vali-1 ST1, Vali-2, Vali-3 and Odin-1 wells over four-to-six weeks.

This campaign is scheduled to begin in early July.

From first gas output through to the end of 2026, AGL will purchase between 9PJ and 16PJ from Vali at a mix of fixed and variable market rates.

As part of this, AGL pre-paid a portion of the contract volume, which is the $15 million pre-payments used to develop the field.

Vintage owns 50% and is operator of the Vali field, with Metgasco and Bridgeport each holding 25%.

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