Quarterly Report
Quarterly Report
Melbourne, Oct 30, 2020 AEST (ABN Newswire) - Vintage Energy Ltd (ASX:VEN) provide the quarterly report.

HIGHLIGHTS

Cooper/Eromanga Basins (ATP 2021)

- Vali-1 ST1 flow test measured stabilised gas rate of 4.3 MMscfd through 36/64" choke at 942 psi

- Vali gas field development concept completed

- 2C Resource to 2P Reserve conversion commenced

Otway Basin (PEL 155)

- Non-binding Memorandum of Understanding signed with Supagas

- Planning underway for Nangwarry-1 flow test

- Production options being considered

The highly successful flow test program for Val-1 ST1 delivered 4.3 MMscfd of measured gas through a 36/64"choke at a flowing well-head pressure ("FWHP") of 942 psi over a two-day period. Transient tests were also undertaken with rates recorded between 3.7 MMscfd (through a 24/64" choke at 1,676 psi FWHP) and 7.5 MMscfd (through a 32/64" choke at 1,593 psi FWHP). The program was carried out safely and as planned.

Strong rates were achieved during all flow periods and quick pressure build-ups were observed during all shut-in periods, with pressure levels quickly approaching around 3,000 psi. All flow rates were restricted through varying choke sizes to ensure proppant was not returned from the formation into the well bore, therefore avoiding any reduction in the effectiveness of the stimulation process.

During the flow testing of the well, the following activities were undertaken:

- Production Logging Tool run, which determined that gas was being contributed by each of the stimulated zones

- Shut-ins, which observed the pressure response of the reservoir, with pressure readings reaching 2,932 psi at the end of the recording period and continuing to build

- Flow testing, with transient tests undertaken under various choke sizes of 24/64", 32/64" and 40/64" over three equal periods of six hours

- Gas samples taken, with the composition in line with typical Cooper Basin Patchawarra wells

A development concept for the Vali Field has been completed and estimates a field life of around 20 years, with up to nine fracture stimulated vertical wells to target production from reservoirs in the Patchawarra Formation and the Tirrawarra Sandstone. The first two wells in the program are planned to be drilled in the first half of 2021, subject to regulatory and joint venture approvals and rig availability. These wells will also appraise upside potential in sands within the Toolachee Formation and Nappamerri Group.

A type well production profile has been developed based on the flow test at Vali-1 ST1, and with reference to the decline characteristics of nearby fields. The current base case development concept for the Vali Field is for initial raw gas production of approximately 5 MMscfd (gross) per well for total production of around 5 Bcf per well (on an average well outcome basis). Surface facilities at Vali will be kept to a minimum through the construction of a main manifold that will gather gas from producing wells and deliver it into existing pipelines, with a separator to possibly be installed depending on the metering system used.

Some of the development concept work has been carried out by GPA Engineering ("GPA"). GPA has consulted with Santos, as operator of the SACB JV infrastructure, and believe the preferred connection point for a Vali Field pipeline is the Santos operated Beckler Field. Gas will then be transported through the existing pipeline system for processing at Moomba once infrastructure access and gas sales agreements are executed. It is envisaged that connection from Vali would be via multiple composite pipelines, the number and size of which will be defined in the detailed engineering phase of work, but scoping work suggests two 4-inch lines would be optimal. This would provide flexibility and continuity of production when new wells are connected into the system.

The capital cost associated with the pipeline connection is based on concept select work carried out by GPA. Well costs are based on a standalone well, however, it is considered that these costs may be reduced by drilling a campaign of wells and applying lessons learned from Vali-1 ST1. The estimated Vali Field capital costs, from a gross perspective, include: $7.0 million for engineering and pipeline construction and connection (including separator); $5.0 million per well to drill, case and complete; $3.0 million per well to fracture stimulate; $0.5 million per well to connect to the Vali manifold; and $1.0 million for geological, geophysical and engineering ("GG&E") studies in the first twelve months.

Operating costs are expected to be low, with well integrity and facility integrity testing part of variable operating expenditure and adjusted based on the number of wells. The field itself will be automated as possible to reduce costs through the elimination of the need for permanent field operators.

Further wells will be drilled as a means of increasing production. These wells will be subject to sales gas transactions that support the level of gas production.

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About Vintage Energy Ltd

Vintage Energy Ltd ASX:VENVintage Energy Ltd (ASX:VEN) has been established to acquire, explore and develop energy assets principally within, but not limited to, Australia, to take advantage of a generally favourable energy pricing outlook.

    


Contact

Neil Gibbins
Managing Director
+61 8 7477 7680
info@vintageenergy.com.au



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