Vintage Energy Ltd (“Vintage”, ASX: VEN) is pleased to announce that it has executed a term sheet with a 90 day exclusivity period to negotiate a binding farm-in agreement for PRL 211 on the South Australian side of the Cooper/Eromanga Basins. Under the proposed joint venture, Vintage will become the operator with 42.5%, Bridgeport will have 21.25%, Metgasco Ltd (“Metgasco”, ASX: MEL) 21.25% and a subsidiary of Senex Energy Ltd (“Senex”) 15%, with Senex to be free carried through the drilling of the first well. PRL 211 is a 98.49 km2 retention licence that is close to infrastructure and has an initial five-year term expiring in October 2022, with an option to renew the permit for a further five years. The licence is located immediately adjacent to ATP 2021 (Vintage 50% and Operator). Senex is currently the operator and 100% interest holder of PRL 211.
The main target in PRL 211 is the Odin structure, which is fully covered by recent 3D seismic and has gas potential in the Patchawarra and Toolachee formations. Odin is located on the southern flank of the Nappamerri Trough near the producing reservoirs at the Bow, Beckler and Dullingari gas fields. Stratigraphic upside similar to that seen in the Beckler-Bow field area is also possible at Odin. The prospect straddles the border between PRL 211 and ATP 2021 and is similar to the Vali prospect scheduled for drilling by the ATP 2021 joint venture in December 2019 (refer ASX releases on 1 October and 12 November 2019).
Under the terms of the farm-in, Vintage, Bridgeport and Metgasco will drill a well into the Odin structure (with Vintage paying 50% of the estimated cost of the well – approximately $2.0 million contribution by Vintage for 42.5% equity). All further work, including the potential to stimulate and flow test the Odin well, will revert to the equity share. The well will be located in PRL 211 with the drilling targeted to take place in Q4 FY20.
The farm-in is subject to a number of conditions, which are to be satisfied by 31 January 2020 (or such later date as the parties may agree), including:
Neil Gibbins, Vintage Managing Director, believes that this farm-in is a logical move for Vintage. “Due to the location of the Odin prospect straddling ATP 2021 and PRL 211, it makes absolute sense for Vintage to have equity along with operatorship over the whole of the Odin structure. The prospect itself is a low risk, highly prospective extension of the Vintage entry into the Cooper/Eromanga Basins and a logical addition to our growing exploration portfolio. This area is well known to our experienced technical team who are familiar with not just exploring but appraising and developing fields in this prolific region. It also complements the Vali prospect which we expect to be drilling this December”.
Odin is a Permian four-way dip closure situated on a structural nose that plunges north-eastwards into the Nappamerri Trough. It is prospective for gas in multiple sands of the Permian aged Patchawarra and Toolachee formations. Seismic mapping indicates that the Toolachee formation has approximately eight metres of structural relief over nearly 5.2 km2, a chance of success (“COS”) of 35% and a high chance of development. The Patchawarra formation has 15 metres of structural relief over nearly 2.5 km2, a COS of 26% and a high chance of development. Stratigraphically trapped gas outside of mapped anticlinal closure is a possibility.