Vintage Energy to undertake further assessment of Vali flow improvement measures

Vintage Energy (ASX: VEN) has confirmed plans to further assess the results of new measures introduced to improve gas flow from its Vali field in the Cooper Basin.

As a 50% interest-holder and operator of the ATP 2021 joint venture with partners Metgasco (ASX: MEL) (25%) and Bridgeport (25%), the company has been leading investigations to unlock issues related to production from the Vali-2 gas well.

The latest strategy has involved the introduction of a wireline conveyed plug, which was run in the wellbore to isolate the lower Patchawarra formation.

Previous logging results have indicated these sands were the major contributor to excess fluid production that had impeded gas flow from the well.

Vali-2 back online

Vintage was able to bring Vali-2 back online on Friday, 8 December following the successful execution of the plugging operations.

Subsequent operations from that date to 11 December were directed at establishing sustainable and stable gas production.

At the time of the release of the latest update, Vali-2 had maintained stable gas flow for 42 hours.

However, Vintage has confirmed that the well has yet to demonstrate improved gas flow, with raw gas flow rates of approximately 0.2 million standard cubic feet per day.

On a positive note, fluid production has been reduced by over 50% from that recorded prior to the plugging operation.

Fluid flow has been relatively stable over the 42-hour period at approximately 100 barrels per day, a rate within facility management capabilities.

Assessments ongoing

Managing director Neil Gibbins said Vintage will continue to flow Vali-2 for the foreseeable future to assess and analyse flow rates and sources.

At the same time, the well has the capability to produce from the shallower Toolachee formation through the opening of a sliding sleeve at a future juncture.

In the busiest 12 months since the company listed five years ago, Vintage completed the Vali gas field facilities and a connection to the Moomba processing facility and commenced production from the Vali gas field in late February.

That gas continues to supply a long-term contract with AGL Energy (ASX: AGL).

It subsequently negotiated and secured an inaugural gas supply contract for its Odin field with Pelican Point Power and completed the accelerated connection of the Odin gas field on schedule with the field brought on-line in mid-September prior to signing an additional gas supply contract with Pelican Point Power for gas sales for a further two years.

Speaking to the company’s shareholders at Vintage’s recent 2023 AGM, chair Reg Nelson said results achieved in 2023 have set the company up for its first full year of production and revenue generation in 2024.

“We expect the year will be highly informative, through the understanding acquired on the Vali and Odin gas fields, the wells completed to date and, on the opportunities, to best build upon the value generated from our supply contracts,” he said.

Continued revenue-generation the goal

Mr Nelson said Vintage’s immediate aim is to continue to generate revenue from the company’s appraisal operations at Vali and Odin and to move towards full-field development plans.

He also revealed that Vintage expects Odin to be of much greater significance than simply an additional well.

“Production rates have been roughly double those of Vali-1 and the gas price is reflective of the 2023 gas market where prices were substantially higher than when the Vali contract was negotiated,” Mr Nelson said.

“Cash returns are greater again as Odin was contracted without a prepayment component,” he added.

“All of this presents a compelling case for appraisal and production expansion. Our technical team has assessed the opportunities: preparations and planning are underway for two additional appraisal wells on the field.”

“Our focus in the region in the near-term can be on execution of the appraisal production process, optimising the production performance of the fields and identifying the most capital-efficient field development plan.”