Vintage Energy Ltd (VEN) has met all conditions precedent for its farm-in to the Sandstone reservoir sequence within the Galilee Basin permits ATP743, ATP744, and ATP1015 (Galilee Permits) in Queensland from Comet Ridge Limited (COI).
Vintage, through a two-stage farm-in, may initially earn up to a 30% interest in the Deeps by committing to spend approximately $8.5 million as part of a staged $15 million work program. Under certain increased funding arrangements, Vintage can earn up to a 48% interest.
Vintage Energy Chairman Reg Nelson said he was pleased to be entering the Galilee Basin with Comet Ridge.
"We believe the Galilee Basin provides the right ingredients for a successful gas project and, subject to initial gas flows, could make a material difference in the east coast gas story in a relatively short time," he said.
The farm-out relates to the 'Deeps' within each of Comet's Galilee permits, defined as including all strata beneath the Permian coals (Betts Creek Beds or Aramac coals) with the main target being the Galilee Sandstone sequence. This sequence has previously flowed gas to surface during formation testing at the Lake Galilee 1 (1964) and Carmichael 1 (1995) wells.
Comet Ridge Chairman Mr James McKay said he was pleased to formally welcome the Vintage Team to the sandstone exploration and appraisal effort in the Galilee Basin following execution of the Joint Venture and Co-ordination agreement.
"Comet Ridge has gained considerable geological and technical knowledge about the eastern Galilee Basin". "The Vintage team also brings extensive technical experience and knowledge working in other onshore Australian basins, so the breadth and depth of expertise within this new joint venture is formidable indeed," Mr McKay said.
The work program will commence with the drilling of the Albany 1 conventional gas appraisal well on the Albany sandstone structure, close to the Carmichael 1 well. Albany 1 is expected to spud next month.
Comet Ridge continues to hold a 100 per cent equity interest in the 'Shallows', defined as coal targets that generally range from approximately 600 metres down to 1,100 metres.