Vintage Energy on track to bring Odin gas field online by end of quarter
Vintage Energy’s (ASX: VEN) plans to become a significant supplier to the energy hungry Australian east coast continues to progress at its onshore natural gas fields in the Cooper Basin.
The company is a 50% interest-holder and the operator of the permits ATP 2021 and PRL 211, where its joint venture partners are the well regarded petroleum companies Metgasco (ASX: MEL) (25%) and Bridgeport (25%).
The company has already successfully brought the Vali project in licence ATP 2021 on stream and is now moving ahead towards adding further income via the Odin gas field.
Odin work accelerating ahead
Vintage and its PRL 211 joint venture partners are currently accelerating the connection of the Odin gas field with the aim of supplying domestic gas users by the end of the current quarter.
After commencing site works to connect the Odin-1 gas well in late July, the company recently completed hydrotesting, which has confirmed the integrity of a 1.4 km Fiberspar link from the well.
Work is proceeding in-line with the schedule for Odin to come on-line in September 2023, with the gas to be supplied under a contract with Pelican Point Power (a joint venture between ENGIE Australia and New Zealand (72%) and Mitsui & Co Ltd (28%), from start-up to December 2024.
Vali work delayed
After work to establish stable gas production from the Vali-2 and Vali-3 wells had been held up due to equipment availability and rainfall, new activities are now back underway.
The initial focus has been on Vali-2 where work undertaken to remove a flow restriction was successful.
However, flow rates from the Patchawarra Formation have seen lower gas production and higher fluid production rates than forecast, suggesting production of formation water from at least one zone.
Vali-2 flow rate studies
The JV will now undertake analysis of the zonal water and gas production contribution with tests to be conducted to understand the sources of fluid and gas production. A test using a Memory Production Log Tool (MPLT) will conducted when third party downstream outages are conducted and equipment is available.
The MPLT tests are expected to occur in the second half of August, with data acquired to help develop a strategy to maximise gas production from the well by reducing water production from the Patchawarra Formation.
In the meantime, Vali-2 has been shut in as fluid production rates have exceeded available handling capacity.
Production from the well will resume temporarily for the conduct of the MPLT operations.
Vali-3 ready to resume
Vintage expects to resume gas production at Vali-3 in the latter part of August.
The well commenced producing in late March 2023, before being shut in due to a scheduled downstream outage. Operations to remove accumulated fluid in the well bore are scheduled to be conducted in August 2023, in the same campaign as work at Vali-2.
MPLT data acquisition is also planned for Vali-3 in order to identify intervention options for improving gas to water production ratios and well availability.
It is expected Vali-3 will remain online supplying gas into the field gas sales agreement, subject to interruptions and swabbing operations brought by future downstream outages.
Vali-1 continues to perform
It has been better news at Vali-1, which has continued to perform consistently and in line with expectations.
Vintage said fluid production at Vali-1 is in line with pre-production modelling and well within the capacity of separation and storage facilities designed for the project.
Managing director, Neil Gibbins, said there were a number of highlights in the June quarter.
“A new gas contract, the first for the Odin gas field, will bring a new revenue stream in the first quarter of the new financial year, subject of course to connection project completion. The successful capital raising has provided the footing for the company to push on with work to lift production and cash flow from our Cooper Basin gas fields and to address other growth opportunities.”
“The market for domestic gas supply remains highly encouraging, and Vintage is well placed to benefit. The receipt of ACCC authorisation for long term joint marketing and release of the Mandatory Gas Code has given clarity on our capacity to contract gas and our exemption from the price cap provisions. We are now in a position to add to our contracted supply from Odin should we choose.”
“The start of the new quarter has seen improvement in weather, road closures and equipment availability which had delayed our work programs at Vali-2 and Vali-3. The completion of this work and the completion and commissioning of the interim accelerated connection of the Odin field means the period shapes as another milestone quarter for our production and operations,” he added.