Vintage Energy to raise $5.6m to support continuing gas flow growth
Up-and-coming central Australia gas producer Vintage Energy (ASX: VEN) is aiming to add to its coffers as it continues to ramp up its Odin and Vali fields.
The $5.6 million capital raising will be made up of an institutional private placement and a fully underwritten $3.6 million accelerated non-renounceable entitlement offer.
The entitlement offer will be undertaken in two phases including the newly launched accelerated institutional offer and a retail offer which will kick off on Wednesday 7 June.
Managing director, Neil Gibbins, said the fund raising will largely fund the acceleration of production from the Vali and Odin gas fields in the Cooper Basin.
The company is preparing to increase Vali production from one to three wells, while at the same time it is preparing to Odin on stream.
The joint underwriters to the issue are MST Financial Services and Taylor Collison who will receive an underwriting/selling fee of 4% and a management fee of 2%.
ACCC nod of approval
The company and its joint venture (JV) partners recently received Australian Competition and Consumer Commission (ACCC) approval for joint marketing of gas from Odin.
The approval allows the JV members can now jointly market Odin gas for an initial five years with agreements able to be signed for up to 15 years.
Within the initial period, the JV members now have approval able to enter into gas supply agreements with customers on common terms and conditions, including price.
Estimated to contains 40 petajoules of 2C contingent gas resources, the Odin field is contained with Petroleum Retention Licence 211 (PRL 211) granted by the South Australian Government, and Authority to Prospect 2021 (ATP 2021) granted by the Queensland Government.
Graduating from explorer to producer
“The capital raising will enable Vintage to consolidate on our recent transition from explorer to producer and help capitalise on what is unprecedented interest from gas buyers for our uncontracted gas” Mr Gibbins said.
“Over the past three months we have recorded our first production and revenue and secured an additional gas contract that will bring a second field, Odin, online later this year.
“We expect the pace to quicken in the coming months as we move from one to four producing wells; commence our second supply contract; market longer term supply from Odin; and do the work on the Vali full field development plan and Odin appraisal that can underpin further growth.”
Pelican gas deal
In mid-May, Vintage and its JV partners confirmed they had secured of the first gas supply contract for the Odin gas field.
The contracted with Pelican Point Power Limited, a joint venture between ENGIE Australia and New Zealand (72%) and Mitsui & Co Ltd (28%), is for the supply Odin gas until 31 December 2024.
The gas will supply the Pelican Point Power Station, a 497 MW combined cycle gas power plant in South Australia, regarded as a critical infrastructure asset for energy security and system stability in South Australia.
Created with a strategy focused on assisting with the energy and gas supply crisis in the east coast, Vintage is a 50% interest holder and operator of the ATP 2021 and PRL 211 Joint Venture which also includes Metgasco (ASX: MEL), 25% and Bridgeport (Cooper Basin) Pty Ltd, 25%.