Vintage Energy signs Vali gas supply deal
Australian oil and gas explorer Vintage Energy has signed a heads of agreement to sell the gas produced from its Vali field in Cooper basin to AGL Energy, it said on December 6.
Vintage and its joint venture partners, Metgasco and Bridgeport, will supply all of the gas produced from the field between the middle of 2022 to the end of 2026 to AGL Wholesale Gas, a unit of Australian gas retailer AGL. This is anticipated to be a minimum of 9 petajoules (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, it said.
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The terms set out in the heads of agreement will form the basis of a fully termed gas sales agreement which will include AGL providing an upfront payment of A$15mn ($10.52mn) to the joint venture in three tranches. The funds will be used specifically for the Vali field to fund the work programme, including the completion of all three Vali wells and the tie-in of the Vali field to the nearby Moomba pipeline network.
"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), we are now close to supplying meaningful amounts of gas into the Australian east coast market," Vintage managing director, Neil Gibbins said. "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."
Meanwhile, Vintage in a separate statement said that it has signed a binding term sheet for a A$10mn debt facility with the Pure Resources Fund. The debt facility will form part of the funding of the initial capital requirements of the Vali field over the next two years.
Vintage operates the Queensland permit ATP 2021 containing the Vali gas field with a 50% interest. Metgasco and Bridgeport each hold 25% interest.