Queensland Pacific Metals Ltd. (QPM) has completed the purchase of the Moranbah gas development project in Australia’s Bowen Basin from Arrow Energy Pty. Ltd. for 30 million dollars.
QPM, which made the acquisition through its subsidiary QPM Energy, expects production from the project in the northeast state of Queensland to be 2.85 petajoules (PJ) in the last quarter of 2023. QPM expects that production gradually increase to 3.7 PJ in the fourth quarter. of 2024, he said in a press release on Friday.
“The acquisition of the Moranbah project transforms QPM into the sixth domestic gas producer listed on the ASX”. [Australian Securities Exchange]QPM said.
In the long run, the new asset marks a step towards QPM Energy becoming a “viable stand-alone business, with significant earnings potential from electricity generation and sales to third parties,” QPM said.
The Moranbah field supplies gas to the Townsville power station and industrial companies in north Queensland, according to Arrow Energy.
“The Moranbah project collects, processes and transports mine waste gas (currently twisted or vented) for industrial use,” QPM said in the announcement.
The project has proven and probable reserves of 240 PJ and 269 PJ of contingent (2C) resources, with about 100 producing wells and associated gas gathering infrastructure, according to the press release.
The 2C figure counts “quantities of oil estimated, as of a given date, potentially recoverable from known accumulation through the application of development projects that are not currently considered commercial due to one or more contingencies,” he said the ad “The contingent resources shown in this report are contingent upon the acquisition of additional technical data demonstrating production rates and volumes sufficient to sustain the economic viability of the project and, subsequently, the commitment to develop the resources.”
The reserves are located in production licenses 196, 223 and 224, collectively known as the Moranbah Project, which has been in production since 2004, QPM noted.
The project’s current, mature gas production rate is 10 PJ per year with a processing and compression capacity of 23.4 PJ per year, QPM said.
The purchase includes the right to ship gas through the North Queensland Pipeline, which can carry 35 PJ a year, according to the announcement.
The new owner expects $29.6 million in revenue from gas and electricity sales from the project in the October-December 2023 quarter and $46 million in the same period next year. But it expects negative earnings of $1.6 million from the Moranbah project for the fourth quarter of 2023, before generating earnings of $14.6 million before deductions for the fourth quarter of 2024.
The acquisition “significantly de-risks our gas supply requirements for the TECH project and provides a pathway to create a significant positive cash flow business,” said QPM managing director and chief executive Stephen Grocott. in a statement.
The acquisition also puts QPM Energy “in an ideal position to help regional coal miners reduce gas flaring and venting, enabling them to better meet their obligations under the Safeguard Mechanism reforms of the Commonwealth and the Queensland Government’s emissions reduction targets,” the announcement said.
“We have been working hard in the period leading up to today’s close to identify initiatives designed to improve asset performance. Together with GRPS and other stakeholders, we are now ready to implement them as soon as possible.” , the CEO of QPM Energy. commented David Wrench.
“Furthermore, the tailwinds we have received from the Safeguard Mechanism reforms and the state of the Queensland Electricity Market, position QPME well to grow significantly as a stand-alone business, while still meeting the needs of the TECH project.”
QPM Energy is retaining the Arrow Energy team as part of the acquisition.
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