Vintage Energy Ltd (Vintage, ASX: VEN) is pleased to announce an executed binding Heads of Agreement (HoA) with Metgasco Ltd (Metgasco, ASX: MEL) to become a joint venture partner in the ATP 2021 permit on the Queensland side of the Cooper/Eromanga Basins. The HoA is subject to usual conditions precedent including obtaining ministerial approval and any other necessary consents affecting the permit. These will be sought and agreed prior to signing the farm-in agreement, with both parties using best endeavours to have this undertaken by 30 June 2019. Under the terms of the HoA, Vintage will earn a 50% interest in ATP 2021 through contributing 65% of the cost of the first well (up to a gross cost of AU$5.3 million) and past exploration costs (65% of which is $527,800). Vintage will also fund up to $70,000 of 2D and 3D seismic reprocessing to better define exploration leads in the permit.
ATP 2021 is a 370km2 permit on the southern flank of the Nappamerri Trough. Within 20 kilometres of the permit boundary are oil and gas fields that have produced over 600 Bcf of gas and 11 mmbbl of oil. The permit is partially covered by 2D and 3D seismic, with three main Permian gas prospects and several Jurassic oil prospects and leads already identified. Best endeavours will be made to drill the first well in 2019, which is likely to be in the Vali prospect. The target sections for this well will be the Permian gas reservoirs that have historically been the main producing zones of the Cooper/Eromanga Basins.
Vintage has commenced preparing the requisite regulatory documents to transfer 50% interest in the permit and operatorship to Vintage. Effective immediately, Vintage will project manage the planning and drilling of the first well. The permit is in close proximity to pipelines and facilities, a key investment criteria of Vintage, which will assist in the commercialisation of gas and oil discoveries.
Vintage Managing Director, Neil Gibbins, believes this transaction to be an outstanding opportunity for the company on a number of levels. “The ATP 2021 farm-in is an excellent fit for Vintage mainly due to our technical team’s experience in exploring, appraising and developing oil and gas assets in the Cooper/Eromanga Basins. Our team has proven capability in operating prospective permits such as this at the highest level, and with the close proximity to infrastructure, we will likely be able to fast track commercialisation of any discoveries. Our team has strong relationships with key stakeholders in the Cooper Basin, including the traditional owners, landholders and government. We also very much look forward to working together with the team at Metgasco. Having a high quality joint venture partner such as Metgasco is an added benefit and positions the joint venture well in relation to commercialising this highly prospective and underexplored permit.”