Vintage Energy ASX VEN increase Vali gas flow Queensland Cooper Basin
October 17, 2023
Vintage Energy identifies opportunity to increase Vali gas flow

Vintage Energy (ASX: VEN) has identified a remedial plan that it believes can overcome a production issue at its Vali gas field in the Cooper Basin and increase its gas production from the inland Queensland field.

As operator for the ATP 2021 permit in which Vali is located, Vintage is looking to re-establish production from the Vali-2 gas well after it has been impacted by excess fluid production since mid 2023.

An in-depth examination of new memory production logging tool (MPLT) data found that the two lowermost perforated zones in the Patchawarra formation are the predominant contributors to the well’s excess fluid production which has been impacting gas flow.

The information from the MPLT program found the fluid being produced in Vali-2 is of a sufficient volume to be able to suppress gas flow from the upper sands in the Patchawarra formation, preventing gas production from the well.

Planning for plug insertion

Managing director, Neil Gibbins, said the company is confident it can now remedy the issue effectively and inexpensively by placing a plug above the lower Patchawarra formation perforations allowing the upper, predominantly gas producing, zones to produce unimpeded.

Operations to insert the plug are expected to commence in early November and take approximately 3 days to complete.

Following insertion of the plug, the ATP 2021 joint venture will further assess the commencement of gas production from Vali-2.

A review of potential stimulation programs to ensure future execution does not access potentially water bearing sands beyond those targeted as gas pay is currently being considered.

Production shut-in

Meanwhile, production from the Vali-1 well and the nearby Odin gas field is currently shut-in due to a scheduled third-party downstream maintenance activity, which is expected to conclude in early November.

Prior to the outage, Vali maintained an average production of 2.71 million standard cubic feet per day of raw gas for the three months to 30 September 2023.

This is considered to be a consistent rate that has been displayed with natural decline by other stimulated Cooper basin gas fields which characteristically feature strong early production, a sharp initial decline, and then a long tail of relatively flat production over many years.

Elsewhere, the Odin-1 gas well has been performing steadily and in line with expectations, albeit with flow rates constrained by conservative choke settings employed to maintain downstream temperatures below the design specifications for the flowline.

Mr Gibbins said the well has a proven capacity to restart strongly, and without assistance, after being shut in for a scheduled downstream outage in September 2023.

Production from Odin has averaged 5.4 million standard cubic feet per day since coming online in mid-September 2023.

Strong gas market interest

Vintage’s two gas fields continue to attract strong gas market interest and earlier this month the company signed a new, additional two-year gas sales agreement for the field.

With its joint venture partners Metgasco (ASX: MEL) (25%) and Bridgeport (25%), Vintage agreed and signed terms with the ENGIE owned Pelican Point Power for the supply of gas from 1 January 2025 to 31 December 2026.

Odin was already sending gas to the Pelican Point Power station in South Australia under a May 2023 agreement for the supply of gas from Odin from field start-up to December 2024.

Two fields in production

The signing of that new gas sales deal was another significant event in what has been a remarkable year for Vintage and its plans to supply natural gas to the Australian east coast market.

In February it commenced production from the Vali gas field in permit ATP 2021, located in Queensland adjacent to the Queensland-South Australia border.

The ATP 2021 joint venture, which has the same make-up as the Odin JV, is currently supplying AGL Energy (ASX: AGL) under an initial contract to sell an estimated 9 petajoules to 16 petajoules of gas.

Disclaimer

Get A Free Investor Package
DON’T MISS THE OPPORTUNITY TO JOIN OUR MARKET SUMMARY REPORT FOR A LIMITED TIME

By submitting this form on our website, you agree that we may collect and use your personal information for marketing, and for other purposes as set forth in our privacy policy, which we encourage you to review.