Annual Report 2023
Melbourne, Sep 28, 2023 AEST (ABN Newswire) - In the 2023 financial year, Vintage Energy Ltd (ASX:VEN) made the transition from explorer to producer, commencing gas supply from the Vali gas field and generating its first revenue.
We consolidated this position, accelerating connection of a second gas field, Odin, and securing a second supply agreement. Zero lost time injuries and zero environmental incidents of reportable significance were incurred.
These milestones have been accompanied by frustrations, initially through post-COVID bottlenecks, which delayed completion of the Vali field facilities until February 2023, and then subsurface, which prevented the establishment of gas production from two of the field's three wells.
The detail of these complications and their status is addressed following, under the heading 'Operations'. For the purpose of this overview of the company's year-end position, I note three points of significance.
First, the delay in production from these wells resulted in production and cash generation being lower than expected. This, together with additional costs brought by the remedial field-based operations, necessitated the $5.6 million capital raising conducted in June.
Second, as of September 2023, Vintage is no longer a single field producer. The commencement of supply from Odin is expected to substantially offset the impact in 2024 of lower output from Vali following disappointing performance thus far at Vali-2 and Vali-3.
Third, Vali is in the early stages of an appraisal program, the initial objective of which is understanding the field's reservoir properties so the most value-accretive development plan for Vali can be determined. The lessons acquired during the year will be reflected in a lower risk, better informed, development plan for Vali's uncommitted gas.
The expected value of this gas rose significantly during the year. Markets tightened, buyers offered higher prices to secure supply and the Competition and Consumer (Gas Market Code) Regulations 2023 (Code) exempted Vintage from the $12/gigajoule price cap. Vintage, with over 42 PJ of uncommitted 2P gas reserves and two gas fields connected to the south-east Australian gas markets, has a soundly based fundamental value and outlook.
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About Vintage Energy Ltd
Vintage 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.