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.
QPM, which made the acquisition through its subsidiary QPM Energy, expects production at the project in the northeastern state of Queensland to be 2.85 petajoules (PJ) in the last quarter of 2023. QPM expects output to gradually increase to 3.7 PJ by the fourth quarter of 2024, it said in a press release Friday.
“The acquisition of the Moranbah Project transforms QPM into the 6th largest domestic gas producer listed on the ASX [Australian Securities Exchange]”, QPM said.
In the long run the new asset marks a step toward QPM Energy becoming a “viable standalone business, with significant earnings potentials from electricity generation and third party sales”, QPM said.
The Moranbah field supplies gas to the Townsville Power Station and industrial businesses in north Queensland, according to Arrow Energy.
“The Moranbah Project collects, processes and transports waste mine gas (currently flared or vented) for industry use”, QPM said in the announcement.
The project has proved and probable reserves of 240 PJ and 269 PJ of contingent resources (2C), with about 100 producing wells and associated gas gathering infrastructure, according to the media release.
The 2C figure counts “quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by the application of development project(s) not currently considered to be commercial owing to one or more contingencies”, the announcement said. “The contingent resources shown in this report are contingent upon the acquisition of additional technical data that demonstrate producing rates and volumes sufficient to sustain the economic viability of the project and, subsequently, the commitment to develop the resources.”
The reserves sit in production licenses 196, 223 and 224, collectively referred to as the Moranbah Project, which has been in production since 2004, QPM noted.
The project’s mature and current gas output rate is 10 PJ a year with a processing and compression capacity of 23.4 PJ per annum, QPM said.
The purchase comes with the right to send gas via the North Queensland Gas Pipeline, which can carry 35 PJ per year, according to the announcement.
The new owner projects revenue of $29.6 million 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 $14.6 million in income 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”, QPM managing director and chief executive Stephen Grocott said in a statement.
The acquisition makes QPM Energy also “ideally positioned to assist regional coal miners to reduce gas flaring and venting, allowing them to better meet their obligations under the Commonwealth Safeguard Mechanism reforms and Queensland government emissions reduction objectives”, the announcement said.
“We have been working hard during the period leading up to today’s completion to identify initiatives designed to improve the performance of the asset. Together with GRPS and other stakeholders, we are now ready to implement them as quickly as possible”, QPM Energy chief executive David Wrench commented.
“Furthermore, the tailwinds we have received from Safeguard Mechanism reforms and the state of the Queensland electricity market, position QPME well to significantly grow as a standalone business, whilst still meeting the needs of the TECH Project.”
QPM Energy retains the Arrow Energy team as part of the acquisition.
To contact the author, email [email protected]
Source link
#Queensland #Pacific #Metals #Seals #Acquisition #Moranbah #Project