Vintage Signs Agreement for Vali Gas Sales
Melbourne, Dec 6, 2021 AEST (ABN Newswire) - Vintage Energy Ltd (
ASX:VEN) is pleased to announce a conditional Heads of Agreement ("HoA") between the ATP 2021 Joint Venture parties ("JV") and AGL Wholesale Gas Limited ("AGL") for the sale of all gas produced from the Vali Field from field start-up (mid-CY2022) through to the end of CY2026. This is anticipated to be a minimum of 9 PJ and up to 16 PJ of gross sales gas over the contract term, to be sold on a mix of firm and variable pricing at market rates.
The terms set out in the HoA will form the basis of a fully termed Gas Sales Agreement ("GSA") which will include AGL providing an upfront payment of $15 million to the JV in three tranches as the project moves to first gas, subject to execution of the GSA and the satisfaction of its conditions precedent. The JV funds will be used specifically for the Vali Field to fund the work program, including the completion of all three Vali wells and the tie-in of the Vali Field to the nearby Moomba pipeline network.
Vintage Managing Director, Neil Gibbins said, "Once more I am delighted with how things are progressing as we fast approach becoming a domestic east coast gas producer.
"The Heads of Agreement for the proposed sales of up to 16 PJ of gas to AGL will deliver significant cash flow to the Joint Venture over the term of the contract and also provide the Joint Venture with an upfront payment for funding capital works required to achieve first gas. These are great outcomes for Vintage and all the participants in the agreement.
"I see this agreement as validation that the Vali gas field will be commercialised. Along with our recently announced tripling of reserves for the Vali Field, which took the gross 2P reserves to 101.0 PJ (50.5 PJ net to Vintage, or 50,500,000 GJ), we are now close to supplying meaningful amounts of gas into the Australian east coast market. With strengthening gas prices in the domestic and international markets, it should be very clear to all that the Vali Field is a sizeable and valuable asset for Vintage and its shareholders.
"We are excited to have AGL as a buyer of Vali Field gas and look forward to providing them with a consistent supply of gas for the initial supply term of four to five years."
A competitive process was undertaken for the sale of gas from the Vali Field. The JV has executed the HoA with AGL, which contains the key commercial terms to a fully termed GSA. This HoA provides the greatest amount of flexibility for the JV in terms of gas delivery at the strongest price and represents approximately 9% to 16% of the 2P reserves from the Vali Field as announced by Vintage previously.
The HoA includes a number of conditions precedent to a definitive GSA including a condition that a raw gas processing agreement with the Moomba infrastructure owners, for the processing of Vali gas to sales gas standards, is entered into. Discussions with the Moomba infrastructure owners regarding a processing agreement are progressing. The HoA provides for an exclusivity period during which time the formal documentation for a GSA is expected to be negotiated and executed.
BurnVoir Corporate Finance continues as financial advisor to Vintage and was integral in securing the HoA with AGL. Vintage would like to thank BurnVoir for its work on this transaction, the funds from which will be an important component in funding the Vali Project.
As previously announced on 1 November 2021, ERC Equipoise Pte Ltd ("ERCE") completed an independent evaluation of the Vali Field, which included results from the Vali-2 and Vali-3 wells. As a result of this evaluation, ERCE revised its 1P, 2P and 3P reserves estimates for the Vali Field to include the Toolachee Formation, as well as revising upward the previously booked reserves from the Patchawarra Formation. The following tables detail the combined revised reserves estimates.
The increase in the independently evaluated 2P gas reserves, when compared with the original reserves booking (which only accounted for the Patchawarra Formation), is 201%.
To view the Vali Gas Field reserves, please visit:
https://abnnewswire.net/lnk/Q92VSYT2
About Vintage Energy Ltd
Vintage Energy Ltd (ASX:VEN) has been established to acquire, explore and develop energy assets principally within, but not limited to, Australia, to take advantage of a generally favourable energy pricing outlook.
| ||
|
