- Metgasco (MEL) and its joint venture (JV) partners announce the gas sales agreement with AGL Wholesale Gas (AGL) is now unconditional
- It comes after the JV secured a Vali Field Gas processing agreement with the South Australian Cooper Basin (SACB) JV
- Execution of the GSA allows the JV to call on AGL to make the first two of three $5 million pre-payments to the JV under the GSA, which will be used to bring Vali to first gas production
- Production from the Vali gas field is expected to commence following completion of the field’s three wells and connection to the nearby Moomba gas gathering network
- MEL shares up 3.45 per cent to three cents
Metgasco (MEL) and joint venture (JV) partners Vintage Energy (VEN) and Bridgeport have announced the gas sales agreement (GSA) between the JV and AGL Wholesale Gas (AGL) is now unconditional.
The GSA became unconditional after the JV secured a Vali Field Gas processing agreement with the South Australian Cooper Basin (SACB) JV.
Execution of the GSA means AGL can make the first two of three $5 million pre-payments to the JV under the GSA, which will be used to bring Vali to first gas production.
The processing agreement includes the terms agreed for the transportation of gas from Vali into the Moomba gas facility and its processing for supply to AGL for the duration of the gas sales agreement.
“The execution of the processing agreement is the final commercial milestone allowing the conditions to be met for the company’s first gas sales agreement with AGL. The execution of this agreement will help deliver our goal of becoming a gas producer and generating cash revenue in mid-CY2022,” Metgasco Managing Director Ken Aitken said.
“Metgasco is fully funded for the work to be performed to first gas which encompasses all well activities in preparation for gas production, including a well completion rig campaign, and the pipeline construction and tie-in to the SACB facilities.”
Production from the Vali gas field, discovered in 2020, is expected to commence following completion of the field’s three wells and connection to the nearby Moomba gas gathering network.
The JV has been contracted to supply between nine petajoules and 16 PJ to AGL over a period of about four and a half years.
The GSA represents between nine per cent and 16 per cent of the field’s announced proved and probable reserves.
MEL shares were up 3.45 per cent to three cents at 11:49 am AEST.