Vintage Energy (ASX: VEN) and its Vali joint venture partners have announced the execution of an agreement to tie the gas field into the South Australian Cooper Basin (SACB) pipeline network.
In today’s announcement, the oil and gas explorer and developer confirmed the deal provides for the connection of the Vali gas flowline and ongoing transmission of Vali gas through the network.
It also signifies the completion of all commercial agreements required for gas produced from the Queensland field to flow to Moomba in South Australia, to be processed and supplied for sale to AGL Wholesale Gas Limited.
The Vali gas field lies in south-western Queensland permit ATP 2021, in which Vintage holds a 50% operating interest. Joint venture partners Metgasco (ASX: MEL) and private company Bridgeport (Cooper Basin) Pty Ltd each hold 25% stakes.
Maiden gas sales deal inked with AGL
In March, Vintage and its joint venture partners secured the gas sales agreement with AGL Wholesale, a subsidiary of major energy retailer AGL Energy (ASX: AGL), for the sale of between 9 and 16 petajoules of gas produced from the Vali field over about 4.5 years (ending in 2026).
The finalised deal follows a heads of agreement signed with AGL late last year, which became unconditional once an upstream transportation and processing agreement with the SACB joint venture was executed in April.
Vintage then called on AGL to make the first two of three $5 million pre-payments under the gas sales agreement, to be applied to funding capital works to bring Vali to first gas.
In today’s announcement, Vintage confirmed it has received its $5 million share of the pre-payments.
March quarter activities
In its March quarterly report released last week, Vintage highlighted the maiden gas contract as the key transaction set to transform the company into a gas producer.
Other notable events during the quarter included the commencement of the fracture stimulation and well completion campaign at Vali ahead of the planned connection to the Moomba gas gathering network.
Over at the Odin gas field, which extends from ATP 2021 into another permit held in joint venture by Vintage, Metgasco and Bridgeport, the shut-in Odin-1 well awaits completion immediately following the well completion campaign at Vali.
Towards the end of the quarter, the Cervantes-1 oil well was spudded in Western Australia’s Perth Basin after which Vintage announced it will be plugged and abandoned as it failed to encounter hydrocarbons.
Vintage was earning a 30% stake in the L14 permit containing the Cervantes oil prospect. Its farm-in agreement was specific to the prospect, and it no longer has any obligations in respect of the permit following the plugging of the well and rehabilitation of the site.