Vintage Energy poised to build on 2023 success

Up-and-coming Australian oil and gas company Vintage Energy (ASX: VEN) is looking forward to adding to the significant success it achieved in 2023.

Speaking to the company’s shareholders at Vintage’s 2023 AGM, chair Reg Nelson said the company had transitioned from explorer to project operator in a remarkably short period of time.

He noted that 2023 was the busiest year yet for the company, which saw it make the transition to revenue generation.

“Vintage is still a young company. Each new year has seen the company register new landmarks and pass new milestones. Very few exploration companies achieve this and those that do typically take longer,” Mr Nelson said.

Ready to go

“The results 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 […] to best build upon the value generated from our supply contracts.”

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.

It also commenced production from the Vali gas field to supply a long-term gas contract with AGL Energy (ASX: AGL).

It then negotiated and secured the inaugural gas supply contract for the Odin gas field with Pelican Point Power, completed the accelerated connection of this field on schedule and brought the field online, prior to signing an additional gas supply contract with Pelican Point Power for gas sales for an additional two years.

Aiming to increase revenue

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.

“I believe investors will then regain confidence in the inherent value of our independently certified reserves. That, plus the exploration potential of those assets we hold and intend to build upon.”

Mr Nelson said 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.”

“Cash returns are greater again as Odin was contracted without a prepayment component,” Mr Nelson said.

“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.”

Nangwarry CO2 resource being assessed

Elsewhere, Vintage continues to assess the Nangwarry carbon dioxide (CO2) resource in parallel with its Cooper Basin gas fields.

“2023 saw increased concern about the outlook and implications for food-grade CO2 availability, a critical input for day-to-day staple products and services such as food and beverage production and storage, healthcare, horticulture and fire suppression,” Mr Nelson said.

“Our analysis and engagement consistently reaffirm the potential value of the Nangwarry resource and the case for its commercialisation as a long-term local source of naturally produced food-grade CO2. In a world focussed on decarbonisation and emissions accounting, this opportunity will require ongoing patience – but the reality of diminished availability cannot be ignored.”

“The company holds other exploration interests including licences in the onshore Otway, and Galilee Basins.”