Real Energy Corporation Ltd (ASX:RLE) has executed gas processing and transportation services agreements with major industry players allowing for commercialisation of its Windorah Gas Project in the Cooper Basin.
Binding agreements have been signed with Santos Ltd (ASX:STO) and Beach Energy Ltd (ASX:BPT) and their respective subsidiaries for gas processing at Moomba and gas transportation and tie-in at Mount Howitt.
The gas processing agreement allows raw gas from the Windorah project to be processed into sales gas, which can then be supplied to the east coast Australian gas market.
No need for expensive gas plant
Real Energy managing director Scott Brown said, “The signing of the gas processing agreement allows us to commercialise our gas without the need to build an expensive gas plant and other associated infrastructure.
“These are significant agreements that potentially add considerable value to Real Energy not to mention the fact that these are major de-risking events for our project.”
Shares were up more than 10% to an intra-day high of 9.3 cents.
Santos and Beach Energy have gas processing facilities at Moomba in South Australia and Real Energy has agreed terms for gas processing and transportation services.
An independent geologist has assessed that the 3C gas resource of the Windorah project is 672 billion cubic feet of gas.
Well stimulation completed
The company has completed the well stimulation of Tamarama-2 and Tamarama-3 and will look to establish flow rates for these wells once most of the frac fluids have been recovered from the wells.
Brown said, “Real Energy is very well-placed to take full advantage of growing demand for Australian east coast gas.
“These agreements, together with the upcoming flow rates for Tamarama-2 and Tamarama-3, will build on the excellent results we have received to date at our 100%-owned ATP927P acreage.
“We look forward to moving our gas project into production.
“Right now our immediate focus is the successful delivery of commercially viable gas flows from Tamarama-2 and Tamarama-3.”
The agreements will see the Tamarama wells tied-in at Mount Howitt.