- To acquire 50% of existing discovered resource at Artisan
- Economics improved by consolidating discovered gas at both Artisan and Annie
- Attractive acquisition price of $58.3 million net upfront cash
- Fast tracking production of ECSP
Amplitude Energy (ASX:AEL) plans to fast-track development of the Artisan gas field and its East Coast Supply Project (ECSP) in the offshore Otway Basin after obtaining a 50% interest from Beach Energy.
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Under a binding sale and purchase agreement (SPA), Amplitude is acquiring 50% in permit VIC/L35 for an upfront cash payment of $58.3 million.
As part of the SPA, O.G. Energy has agreed to purchase a 10% interest in Artisan with Amplitude and O.G. Energy each aligned with 50% interests in the asset.
MD and CEO Jane Norman said the transaction accelerates the production of Artisan’s resource and further improves economics.
“This is a win-win for Amplitude, O.G. Energy and Beach with respect to optimising our respective Otway Basin positions.
“We expect to rapidly move to FID on the development phase of the ECSP over the next few months while the drilling of the Juliet and Annie wells is conducted, with Juliet now brought forward and drilling expected to commence by late July or early August.
“Annie and Artisan together provide the base resource for the ECSP, with project economics potentially further improved by Juliet and/or Nestor discoveries. This transaction provides significant value and optionality for the ECSP and provides customers with certainty in an uncertain market.”
A range of development concepts for Artisan are being progressed involving tie-in of Artisan to Amplitude Energy’s existing Offshore Otway Basin infrastructure in 2028, in conjunction with the development phase of the ECSP.
Initial technical work indicates the composition of Artisan’s gas is compatible for processing through Amplitude Energy’s Athena gas plant, alongside the discovered Annie resource and any other discoveries made in ECSP exploration targets.
Primary offshore approvals and licences for Artisan are in place, and project-level approvals for the development of the field through Amplitude Energy’s infrastructure will be integrated with other ECSP approvals, subject to final investment decision.
Ms Norman said development of Artisan through Amplitude Energy’s infrastructure has significant cost advantages due to the proximal nature of its tie-in to the Casino-Henry-Netherby pipeline.
“The short tie-in distance, pre-existing pipeline tee pieces, and ability to use flowlines ordered with ECSP for the tie-in, provides the ability to integrate Artisan into existing ECSP development activities.
“Adding Artisan to the ECSP bolsters the gas available to southern market customers. Its proximity to demand centres in Victoria and South Australia provides greater certainty of deliverability, ability to support longer-term offtake confidence, and lower delivered cost through avoidance of long-haul transportation exposure.”
AEL is up 0.30% to $1.68. Mkt cap $502.3M.
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