Vintage Energy (ASX: VEN) has amended and extended its $10 million secured loan facility with PURE Asset Management, pushing the term expiry to 31 January 2028 while keeping the interest rate unchanged.
The extension follows endorsement of a planned drilling program through a $5 million South Australian Gas Incentive Grant, which is expected to fund up to 50% of the cost of two new wells subject to grant agreements.
The terms also include provisions for early repayment of a $3 million tranche prior to 31 December 2026 in the event of a successful Southern Flank joint venture reformation inclusive of a farm-down of interests not presently held by Vintage.
If that tranche is repaid, the minimum cash covenant would reduce from $1.5 million to $1 million, providing additional flexibility in capital management.
Clear Production Runway
“The amendments agreed with PURE have given Vintage a clear runway for execution of our plans to lift production, activity and value generation of our Southern Flank gas projects,” managing director Neil Gibbins said.
Odin and Vali contain more than 135 petajoules (PJ) of undeveloped gas 2P reserves on a gross joint venture basis, and the amendment enables the company to focus on bringing more of this gas to market and lifting cash generation.
“PURE Asset Management is a valued financier to Vintage, whose commitment enabled the initiation of appraisal production from Odin and Vali in 2022,” Mr Gibbins added.
“Now, these amendments will support our shift in project emphasis from aggressive appraisal to production and the reformation and reinvigoration of the Southern Flank joint ventures.”
Drilling and Joint Venture Plans
Vintage plans to drill new gas production wells at the Odin and Vali gas fields within the PRL 211 and ATP 2021 joint ventures, in which the company holds 50% equity and acts as operator.
The South Australian government has announced a total of $5 million in grants to the joint ventures for the drilling of the Odin-3 and Vali-4 wells, subject to signing of grant agreements.
Vintage said the amended facility and the government grant underscore expectations of increased gas supply from Odin and Vali as the company shifts its focus toward production growth and joint venture restructuring.
“Securing these amendments is a foundational element in the implementation of our plans and the support provided by PURE is substantive and appreciated,” Mr Gibbins said.
