Vintage Energy pursues resource upside at Vali ahead of gas production

Vintage Energy VEN ASX gas well drilling Nangwarry Otway Basin Vali
Vintage Energy’s revised strategy involves building resources to maximise value from the Vali gas field as well as ensuring infrastructure is secured with appropriate capacity.

Vintage Energy (ASX: VEN) has a busy 1H of 2021 planned, with drilling to be completed at Vali-2, Odin-1, and Cervantes-1 wells, while testing Nangwarry-1 is scheduled for later this month.

In the Cooper Basin, Vintage owns 50% of ATP 2021 and work will now prioritise assessing the resource upside of the Vali gas field and surrounding area.

This will include drilling Vali-2 and Odin-1 wells ahead of the flowline infrastructure purchase for Vali-1 ST1 and associated completion work.

At Vali-2, Vintage and its joint venture partners Metgasco (ASX: MEL) which owns 25%, and Bridgeport Cooper Basin Pty Ltd (25%) plan to target the Toolachee Formation gas accumulation in the Vali structure. If this proves successful, it will provide additional reserves to those recently certified in the Patchawarra Formation.

Desk top studies will also be completed to identify further prospectivity and upside in the region.

Drilling of Vali-2 is scheduled to begin in April or May depending on rig availability and other approvals.

Vintage managing director Neil Gibbins said Vali-2 was an “exciting appraisal well”.

This approach will postpone expected first gas production from Vali-1 to late 2021 or early 2022.

However, Vintage pointed out turning its focus to resource upside ahead of first gas will enable it to optimise the value of its assets.

Vintage claims the benefits from following this strategy are “fourfold”.

“The planned work program will ensure optimum flowline capacity is installed and in turn maximise value and flexibility for gas production in the Vali region,” Mr Gibbins explained.

“Although first gas will be later than initially anticipated, the value of the Vali field and surrounding areas is expected to be enhanced as a result of rising gas prices, with the deferral potentially leading to better contract terms.”

“Nevertheless, Vintage will continue to explore all avenues to accelerate production,” he added.

Odin prospect

Vintage also has a 42.5% stake in PRL 211 within the Cooper Basin which hosts the Odin prospect. Following completion of Vali-2, the Odin-1 well will be drilled.

This is expected to begin in either May or June.

According to Vintage, the Odin structure was de-risked due to the drilling success at Vali-1.

The structure has gross prospective resources ranging from 1U low estimate of 3.6 billion cubic feet, to 2U best estimate of 12.6 Bcf and 3U high estimate of 42.6 Bcf.

Nangwarry-1

The company holds a 50% stake in PEL 155 in the Otway Basin where testing of Nangwarry-1 is due to begin later in the month.

A short initial test will be undertaken in the mid-Pretty Hill Sandstone to verify Vintage’s theory that upside exists in this section. Assessment will then move into the shallower zone and will comprise a flow test of individual sands in the interpreted carbon dioxide column at the top of the Pretty Hill Sandstone.

Nangwarry-1 CO2 has gross recoverable estimates ranging from a low of 7.8 Bcf, to a best of 25.1 Bcf and a high of 82.1 Bcf.

According to Vintage, the upcoming production test at Nangwarry-1 is a key milestone on the path to first production of food grade CO2.

The co-produced methane will be used to run the production plant.

Cervantes prospect

Across the country in Western Australia’s Perth Basin, Vintage has a 30% interest in the Cervantes prospect, which is within the L14 licence.

The prospect’s chance of success is 28% due to its proximity to the Jingemia oil field and processing facility.

Cervantes has a gross prospective resource ranging from a 1U low estimate of 6 million barrels, 2U best estimate of 15.3MMbbl and 3U high estimate of 41.9MMbbl.

A full rig contract agreement for drilling Cervantes-1 is in the final stages of negotiations.

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