Omega set to list today as Queensland gas space heats up

Omega Oil & Gas is listing today, and the timing couldn’t be better, with interest in the Queensland gas sector heating up.

Just a fortnight ago QLD-focused State Gas Limited (ASX:GAS) attracted a $7 million investment from leading energy sector experts St Baker – who’re headed by Trevor St Baker, has a strong track record of successful energy sector investments in Australia and overseas.

The investment comes at a time of unprecedented market upheaval and the East Coast faces a growing shortfall in gas supplies, and everyone is scrambling to secure new supplies to ensure energy security.

It certainly bodes well for Omega Oil & Gas (ASX:OMA), who has high hopes for its two exploration permits in South East Queensland, ATP 2037 and ATP 2038, smack bang in the Surat Basin, which is hot property right now.

Investment on the increase in QLD

The company’s $15m IPO was oversubscribed with notable investment from coal billionaires the Flannery family and CEO Lauren Bennett says interest – and investment – in Queensland gas is definitely on the rise.

“There is an energy revolution that’s starting to happen in Queensland, with the state government’s revised strategy to reduce its reliance on coal as an energy resource, gas will be an important component to facilitate Queensland’s energy transition, and for the rest of Australia,” Bennett said.

“We were oversubscribed so we were able to raise more than the $15 million, which shows firstly the level of support for Omega’s portfolio, and it is a quality portfolio, but also shows a greater understanding by investors as to the importance of gas in guiding Australia’s energy future.

“Whilst Omega is not the pioneer of the Permian Deep Gas, we are most certainly an early mover and we are encouraged by the increasing interest in deep gas potential by our neighbours Shell, Santos and Origin. We expect that Omega will be working collaboratively with our peers, that’s certainly our ambition.

Location of Omega’s oil and gas projects. Pic: Supplied

Potential multi-TCF gas resource

The company is planning to kick off exploration at the Permian Deep Gas play which, if successful, represents a potential – and massive – 3TCF gas resource.

“What makes us most excited is the value proposition of the company. We have approached our IPO with the intention of realising the maximum value of our entire portfolio for our shareholders. We have raised sufficient funds to be able to prove the deep gas potential within our core assets (ATP 2037 and 2038) as well being able to realise organic cash flow through our existing oil producing assets within PL17. The job in front of the OMA team over the next 12 months is the deliver and execute, and I am confident in the teams ability to do so” Bennett said.

“We’ve got two gas assets, exploration assets or authority to prospect – ATP 2037 and 2038 which are adjacent – and then to northeast of those two parcels, we’ve got production license, PL17 (oil) with overlying CSG.”

Omega will drill one deep well in each ATP starting in February next year, but it is also reinstating oil production at the Bennett Fields at its PL17 permit, which was discovered in the 1970s but suspended in the 2000s due to low oil prices.

Associated liquids could be monetized

Not only does Omega have a company-making potential resource – because, let’s face it, 3TCF is an ocean of gas – you’d be hard pressed to find another junior out there with a meaningful quantity of associated liquids.

“Nobody talks about it but the crude market in Queensland and onshore Australia is extremely tight and as reported quiet extensively Australia has an unhealthy reliance on imported refined oil products. That makes any potential oil resource particularly of the scale estimated to be within ATP 2037 and 2038 extremely valuable,” Bennett said

“The associated liquids within our ATP’s will enable Omega to commercialise production relatively early in comparison to other large-scale projects. This is important as developing even just 1 Tcf of gas requires a fair amount of investment, and years of planning. If Omega is successful in its initial exploration program we will be able to generate early revenue through the liquids, whilst we work on full-scale gas development.

“If the gas comes in and our thesis is proven, then we can start moving towards commercial production, but if the gas and the liquids come in that makes that path to commercialization easier, because we’re not necessarily having to come back to market to raise as much capital every time we need to do something new.”

This article was developed in collaboration with Omega Oil & Gas 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.