Senex Energy Limited disclosed Monday that the company has signed a gas sales agreement (GSA) with the Santos-operated South Australian Cooper Basin Joint Venture (SACB JV) for the supply of raw gas over two years from the Hornet gas field in the southern Cooper-Eromanga Basin.
The GSA provides for the supply of unprocessed raw gas on a discretionary basis from the Hornet gas field within PEL 115 (Senex 100 percent), with up to 10 million standard cubic feet per day (Maximum Daily Quantity) to be supplied commencing in the September quarter of 2014. This allows Senex the flexibility to monetize the gas during the appraisal stage without the risk of penalties for non-delivery.
The raw gas comprises natural gas, condensate and liquefied petroleum gas (LPG), and Senex will be paid for each component. Pricing for condensate and LPG will be linked to international product pricing, less specific transport and processing charges. Pricing for natural gas is confidential.
Senex Managing Director and CEO Ian Davies said the agreement demonstrated the company’s commitment to derisk and increase the value of its Cooper Basin gas position.
“This agreement provides Senex with an opportunity to realize gas and liquids sales revenue while we undertake extensive flow testing at the Hornet gas field to assess the quality and extent of the field before further appraisal drilling and commercialization. Further, the discretionary basis of the GSA gives Senex the ability to be paid for raw gas sales while testing with no penalties when we are not,” he said.
Senex is currently planning for the installation of water, condensate and gas separation equipment to enable raw gas sales from Hornet, connecting to the SACB JV network at Allambi approximately 3.7 miles (6 kilometers) away.
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