Vintage Energy restructure set to drive savings, enhance output across its gas portfolio

Vintage Energy (ASX: VEN) is set to sharpen the focus on its producing gas assets with a restructure aimed at reducing overhead costs while increasing production from its central Australia projects.

Under the restructure, the company will reduce staff headcount and direct staff salaries by 41%, which will in turn lower its annual salary cost by approximately $1.14 million.

Managing director Neil Gibbins said the changes will take place in the first quarter of 2025, with savings to begin with greatly offset by redundancy costs.

‘Highly motivated group’

“The Vintage Energy team has been a very tight and highly motivated group over the years since listing,” Mr Gibbins said.

“Whilst the company understands it must deliver on savings we also acknowledge we will farewell staff, many of whom have been with the company from the start and have all provided unwavering support.”

“We sincerely thank them and wish them well for the future.”

Review underway

Mr Gibbins confirmed Vintage will continue to focus on its southern flank, Vali and Odin gas fields in the Cooper Basin.

Following a recent assessment of issues impacting gas flows at the two fields, a review is now underway to identify further options for enhancing production from the existing wells.

This includes removal of scale accumulation found in a recent assessment program to be impeding production and interfering with accurate metering.

Increased production

The company has already seen an increase in production of more than 2.3 times at the Odin-1 well following scale removal.

Vintage is also investigating low-cost evaluation, remediation and optimisation projects, with work commencing this week on installing chemical injection equipment in the gas line to limit scale production in the Odin meter.

The company is planning to test if this production enhancement can also be successful at its nearby Vali gas field.

Galilee merger terminated

The restructure comes a week after Vintage announced that it had terminated a proposal to acquire all of the fully paid ordinary shares in Galilee Energy (ASX: GLL).

Both parties determined that the original proposal was no longer in the best interests of their respective shareholders.

All the same, Vintage chair Reg Nelson said it was clear that there was latent value for uncommitted gas such as that held by Vintage to help address shortfalls in supply to east coast Australia forecast from 2026 on.