The HoA concerns the sale of all gas produced from the Vali field in the Cooper Basin in South Australia and Queensland.
The agreement will last from the middle of 2022 during the field start-up until the end of 2026.
AGL has agreed to make a pre-payment of $15 million to the joint venture for funding the Vali Field work to first gas in the HoA.
These funds plan to be used for the Vali Field to fund the work program, including the competition of all three Vali wells and the tie-in of the Vali Field to the neighbouring Moomba pipeline network.
Vintage estimates this to be a minimum of 9 pj and up to 16 pj of gross sales gas throughout the contract term.
Vintage managing director Neil Gibbins said he was “delighted” with how things are progressing.
“[The HoA will] deliver significant cash flow to the Joint Venture over the term of the contract and also provide the Joint Venture with an upfront payment for funding capital works required to achieve first gas,” Gibbins said.
“These are great outcomes for Vintage and all the participants in the agreement.”
Gibbins said he saw the agreement as “validation” that the Vali gas field will be commercialised.
“Along with our recently announced tripling of reserves for the Vali Field, which took the gross 2P reserves to 101.0 pj, we are now close to suppling meaningful amounts of gas into the Australian east coast market,” he said.
“With strengthening gas prices in the domestic and international markets, it should be very clear to all that the Vali Field is a sizeable and valuable asset for Vintage and its shareholders.”
Recently, Vintage tripled the gas reserves of the Vali field from $30.3 billion cubic feet (Bcf) of gas to 92 Bcf.
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