Metgasco signs processing agreement securing Vali gas sales and pre-payment with AGL
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Metgasco has secured the processing agreement with the South Australian Cooper Basin (SACB) JV for its Vali field gas JV in Queensland.
Notably, the processing agreement was a condition precedent to the AGL Gas Sales Agreement (GSA) – which is now unconditional.
AGL is now required to make the first two tranches of the pre-payment totalling $10 million under the GSA.
The processing agreement includes the terms agreed for the transportation of gas from the Vali gas field into the Moomba gas facility and for its processing for supply to AGL for the duration of the GSA.
The company says the AGL pre-payment will assist funding of the capital works to bring Vali to first gas, which is expected to commence following completion of the field’s three wells and connection to the nearby Moomba gas gathering network.
“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,” Metgasco (ASX:MEL) MD Ken Aitken said.
“The execution of this agreement will help deliver our goal of becoming a gas producer and generating cash revenue in mid CY2022.
“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.”
The JV has contracted to supply between 9 PJ and 16 PJ to AGL over a period of approximately four and a half years and the GSA represents between 9% and 16% of the field’s announced gross Proved and Probable Reserves.
This article was developed in collaboration with Metgasco Limited, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.