Vintage Energy Ltd (ASX: VEN) signs agreement for the sale of Vali gas
Melbourne, December 6, 2021 AEST (ABN Newswire) – Vintage Energy Ltd (ASX: FRI) is pleased to announce a conditional agreement (“HoA”) between the parties to the ATP 2021 Joint Venture (“JV”) and AGL Wholesale Gas Limited (“AGL”) for the sale of all gas produced from the field Vali from the start field (mid-CY2022) until the end of CY2026. This is expected to represent a minimum of 9 PJ and up to 16 PJ of raw gas sales over the term of the contract, which will be sold at a combination of firm and variable prices at market rates.
The conditions set out in the MoU will form the basis of a fully appointed Gas Sales Agreement (“GSA”) that will include AGL providing an upfront payment of $ 15 million to the joint venture in three installments as the project progresses. go to first gas, subject to the execution of the GSA and the satisfaction of its conditions precedent. The funds from the joint venture will be used specifically for the Vali field to fund the work program, including the completion of the three Vali wells and the connection of the Vali field to the neighboring Moomba pipeline network.
Vintage Managing Director Neil Gibbins said: “Once again, I am delighted with the way things are progressing as we quickly approach becoming a national gas producer on the East Coast.
“The agreement leaders for the proposed sales of up to 16 PJ of gas to AGL will provide significant cash flow to the joint venture over the term of the contract and will also provide the joint venture with an upfront payment to finance the work of capital investments required to achieve this are excellent results for Vintage and all parties to the agreement.
“I see this agreement as a validation of the commercialization of the Vali gas field. Along with our recently announced reserve tripling for the Vali field, which brought gross reserves from 2P to 101.0 PJ (50.5 PJ net to Vintage (50,500,000 GJ), we are now on the verge of supplying significant amounts of gas to the Australian east coast market. With the strengthening of gas prices in domestic and international markets, it is expected to be very clear to all that the Vali field is an important and valuable asset for Vintage and its shareholders.
“We are delighted to have AGL as our purchaser of Vali Field gas and look forward to providing them with a consistent supply of gas for the initial four to five year supply period. ”
A competitive process has been launched for the sale of gas from the Vali field. The JV executed the HoA with AGL, which contains the key business terms of a fully qualified GSA. This HoA offers the greatest flexibility to the JV in terms of delivering gas at the highest price and represents approximately 9% to 16% of the 2P reserves of the Vali field as previously announced by Vintage.
The HoA includes a number of prerequisites for a final GSA, including a condition that a raw gas processing agreement with Moomba’s infrastructure owners, for processing Vali gas to sales gas standards, either concluded. Discussions with Moomba’s infrastructure owners regarding a processing agreement are progressing. The HoA provides for an exclusivity period during which formal documentation for a GSA should be negotiated and executed.
BurnView Corporate Finance continues as financial advisor to Vintage and was instrumental in securing the HoA with AGL. Vintage thanks BurnView for his work on this transaction, the funds of which will be an important component of the financing of Project Vali.
As previously announced on November 1, 2021, ERC Equipoise Pte Ltd (“ERCE”) completed an independent assessment of the Vali field, which included results from the Vali-2 and Vali-3 wells. As a result of this assessment, ERCE revised its estimates of 1P, 2P and 3P reserves for the Vali field to include Toolachee training, as well as an upward revision of previously reserved reserves for the Patchawarra training. The following tables detail the combined revised reserve estimates.
The increase in independently assessed 2P gas reserves, compared to the initial reserve reservation (which only represented the Patchawarra formation), is 201%.
To consult the reserves of the Vali gas field, please visit:
About Vintage Energy Ltd
Vintage Energy Ltd (ASX: VEN) was formed to acquire, explore and develop energy assets primarily in Australia, but not limited to, in order to take advantage of the generally favorable energy price outlook.
Vintage Energy Ltd