Operations Update

Friday, February 5, 2021

Vintage Energy Ltd (ASX: VEN, “Vintage”) provides an update on activities relating to the testing of Nangwarry-1 in the onshore Otway Basin, the Vali gas field and Odin prospect in the Cooper Basin and the Cervantes prospect in the Perth Basin.

  • Firm three well drilling program for H1 2021 (Vali-2, Odin-1 and Cervantes-1)
  • PEL 155: Nangwarry-1 testing planned for mid to late February 2021
  • ATP 2021: Non-binding rig LOI to drill Vali-2; Vali-1 ST1 to be completed with upcoming wells; flowline equipment purchase deferred to incorporate well results and evaluation of upside potential; joint gas marketing approved by ACCC
  • PRL 211: Non-binding rig LOI to drill Odin-1
  • Cervantes: Non-binding rig LOI to drill Cervantes-1, contract being negotiated

Otway Basin – PEL 155 (Vintage 50%, Otway Energy Pty Ltd 50% and operator)

The procurement of long lead items for the testing of Nangwarry-1 is nearly complete. These items, along with the Superior Energy rig, will be mobilised to site around the middle of February 2021, with testing of Nangwarry-1 to commence soon thereafter.

The testing program will include a short test of the mid-Pretty Hill Sandstone to verify upside potential we believe exists in this section of the column, which will be followed by a move into the shallower zone and a flow test of individual sands in the interpreted CO2 column at the top of the Pretty Hill Sandstone. The test will be completed once a desired stabilised flow rate and volumetric estimate of the recoverable CO2 is obtained. Gross recoverable estimates for Nangwarry-1 CO2 are: Low of 7.8 Bcf (3.9 Bcf net), Best of 25.1 Bcf (12.6 Bcf net), High of 82.1 Bcf (41.1 Bcf net) (refer ASX release dated 31 August 2020).

The production test is a key milestone on the path to first production of food grade CO2. If successful, the test will confirm volumes of saleable CO2 and allow the Joint Venture to consider appropriate funding options for the infrastructure required to deliver food grade CO2. The co-produced methane will be used to run the production plant, with Supagas already commissioning preliminary design work for a skid mounted CO2 plant, in line with the MOU signed in 2020.

Cooper Basin – ATP 2021 (Vintage 50% and operator, Metgasco Ltd 25%, Bridgeport Cooper Basin Pty Ltd 25%)

After consideration, the Joint Venture has elected to prioritise work to assess the resource upside of the Vali gas field and surrounding area, which will include the drilling of Vali-2 (and Odin-1) ahead of the purchase of flowline infrastructure. Vali-2 will address the interpreted Toolachee Formation gas accumulation in the Vali structure, which, if successful, would provide additional reserves to those recently certified in the Patchawarra Formation.  As well as this, desktop studies will address further prospectivity and potential upside in the region. The benefits behind this timing are fourfold. It is expected to deliver an appropriately sized flowline over the long-term, allow for the potential development of a production hub, provide gas marketing advantages, and give greater exposure to a rising gas price. The planned timing for drilling Vali-2 will be around April/May 2021, pending rig availability and other approvals. Vali-1 ST1 completion will now follow the drilling of Vali-2 and Odin-1 to allow for a possible campaign approach for well completions. A non-binding Letter of Intent (“LOI”) has been signed with Schlumberger to use either SLR Rig-184 or rig SLR 183 for the drilling of Vali-2 and Odin-1, with an option to drill a further ATP 2021 well. It is expected that the above approach will be favourable from a value perspective, however, it will likely result in the deferral of first gas production to late this year or possibly early next year.

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Vintage Energy

Vintage Energy Ltd 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.

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