Vintage Energy (ASX: VEN) has launched a $2.1 million capital raising to assist with technical evaluation of oil prospects and the installation of a permanent connection at the Odin gas field in the South Australian portion of the onshore Cooper Basin.
The new connection will replace existing temporary facilities and generate operating expenditure savings of around $700,000 per annum for the ATP 2021 / PRL 211 joint venture between Vintage (50%), Metgasco (ASX: MEL) (25%), and Bridgeport (25%).
Vintage announced plans to move towards full ownership of the venture in November, with the acquisition of Metgasco’s stake following receipt of a deemed sale offer for Bridgeport’s equity.
Funds from the capital raising will enable production from the Odin field to be fast-tracked to commence supply under contract to the Pelican Point Power joint venture between ENGIE Australia and New Zealand (72%) and Mitsui & Co (28%).
The partners operate the 497-megawatt Pelican Point combined cycle gas power plant in South Australia, regarded as a critical infrastructure asset for the state’s energy security and system stability.
Non-Renounceable Offer
Vintage confirmed the capital raising will take the form of a 1-for-4 non-renounceable entitlement offer for the issue of approximately 521.73 million shares priced at $0.04 each to eligible shareholders—a 20% discount to the last traded price of $0.05.
Each new share issued will be accompanied by two free-attaching options with an exercise price of $0.05 cents and a two-year expiry.
Vintage’s chair and managing director have each confirmed their participation in the entitlement offer with a total contribution of $200,000.
The company’s directors retain the right to place any shortfall at their discretion within three months subject to ensuring no shareholding will exceed 19.9% or result in a change of control.
Southern Flank Drilling
The raising will enable Vintage to continue preparations for the drilling of two gas production wells in its southern flank acreage.
The wells have attracted $5m in funding under the South Australian government’s $17.5m Gas Initiative Grant Scheme.
It is estimated the grant will be sufficient to fund up to 50% of the drilling costs of the Odin-3 and Vali-4 gas wells.
Vintage is also keen to test the oil prospectivity of its acreage, which has been affirmed by oil discoveries and producing fields in the region, along with oil shows recorded in all of the wells drilled to date at the Odin and Vali fields.
Exploiting Gas Reserves
Vintage managing director Neil Gibbins said funds raised would allow the company to exploit the value of its gas reserves – the large majority of which are uncontracted – and capitalise on the oil prospectivity of the southern flank acreage.
“We have mapped over 20 prospects and leads in ATP 2021 and geotechnical analysis has yielded two highly-attractive drilling targets [and] are continuing to receive inbound inquiry from parties interested in participating in our acreage,” he said.
“Recent weeks' events have highlighted the potential value of oil discoveries in the region—we have mapped over 20 prospects and leads in ATP 2021 and geotechnical analysis has yielded two highly attractive drilling targets.”
“Our gas fields continue to generate revenue and, with gross undeveloped proved and probable reserves of 135 petajoules, the Vali and Odin projects have significant volumes for increased and long-term gas cash generation.”
