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Amplitude Energy (formerly Cooper Energy), an Australian gas production company focused on supplying the Southeast domestic gas market, has set wheels in motion to take over the operatorship of an offshore gas field in the Otway Basin off the coast of Australia.
Amplitude has disclosed a binding sale and purchase agreement (SPA) to purchase a 50% interest in VIC/L35, which contains the Artisan gas field in the offshore Otway Basin, from Beach Energy, thereby accelerating target gas production to 2028, together with the East Coast Supply Project (ECSP).
As part of the SPA, O.G. Energy has agreed to purchase a 10% stake in Artisan on the same commercial terms, such that each company has a 50% interest in the asset. This gas field is situated approximately 17 kilometers southeast of Amplitude Energy’s existing offshore Otway Basin pipeline.
The Artisan discovery was made by the Beach Energy (60%) and O.G. Energy (40%) joint venture in March 2021, with the well suspended at that time for future development. In September 2024, a production licence, VIC/L35, covering the Artisan field, was granted.
Jane Norman, Managing Director and CEO, commented: “Producing Artisan through Amplitude Energy’s existing infrastructure allows faster and lower-cost development of this gas for the east coast domestic market.
“Artisan development costs will significantly benefit from leveraging the existing ECSP program and our readily-available infrastructure. This is a win-win for Amplitude, O.G. Energy and Beach with respect to optimising our respective Otway Basin positions.”
The company’s net share of acquisition consideration consists of an upfront cash payment of $58.3 million on completion of the SPA, plus a royalty of A$3.75/GJ (nominal) over its share of future Artisan production, capped at 62 PJ gross, or 31 PJ net to AEL.
Norman underlined: “We expect to rapidly move to FID on the development phase of the ECSP over the next few months while the drilling of the Juliet and Annie wells is conducted, with Juliet now brought forward and drilling expected to commence by late July or early August.
“Annie and Artisan together provide the base resource for the ECSP, with project economics potentially further improved by Juliet and/or Nestor discoveries. This transaction provides significant value and optionality for the ECSP and provides customers with certainty in an uncertain market.”
The development concepts, which are being progressed, involve the tie-in of Artisan to Amplitude Energy’s existing Otway Basin infrastructure in 2028, in conjunction with the development phase of the ECSP.
The initial technical work indicates the composition of the field’s gas is compatible for processing through the firm’s Athena gas plant, alongside the discovered Annie resource and any other discoveries made in ECSP exploration targets.
With the primary offshore approvals and licenses for Artisan in place, project-level approvals for the development of the field through the Australian player’s infrastructure will be integrated with other ECSP approvals, subject to a final investment decision (FID).
Amplitude claims that the development of Artisan through its infrastructure has significant cost advantages due to the proximal nature of its tie-in to the Casino-Henry-Netherby pipeline. The short tie-in distance, preexisting pipeline tee pieces, and ability to use flowlines ordered with ECSP for the tie-in provide the ability to integrate the field into existing ECSP development activities, bolstering the gas available to southern market customers.
The company underlines that the proximity to demand centers in Victoria and South Australia provides greater certainty of deliverability, ability to support longer-term offtake confidence, and lower delivered cost through avoidance of long-haul transportation exposure.
According to Amplitude, the parties have agreed to amend the Transocean Equinox rig’s drilling schedule to enable the Artisan development well to be brought forward, with activities on the well starting earlier this month. Beach Energy will fund the Artisan development well and completion activity, and remain the operator while this is undertaken, with the SPA conditional on the completion of the well with a subsea tree.
The amendment of the drilling schedule is expected to result in Amplitude Energy receiving the Transocean Equinox rig during July-August to conduct the Juliet-1 exploration well, followed by the Annie-2 development well.
In addition, a decision on whether to drill the Nestor prospect will be made by the Australian firm and O.G. Energy at a later date. The company emphasizes that exploration success at Juliet and/or Nestor would further improve project economics and have synergies with Artisan.
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