Industry News

ADZ Energy’s strategic vision aims to overcome past challenges and reap tangible upstream gains

Rising from the ashes of Armour Energy, ADZ Energy has fresh owners, money in the bank and a three-year development strategy that aims to boost production and reserves.

ADZ acquired Armour's Australian assets in January after the latter entered liquidation late last year. Armour had been struggling under a substantial debt burden for many years amid poor financial and operational performance. This led the company to enter receivership in November 2023.

ADZ — founded by Daniel Liu and Aiden He, who represent two private family investment companies — aims to do what Armour could not: make a broad portfolio of upstream assets profitable.

ADZ CEO Christian Lange, who transitioned with his team from Armour, spoke to Energy News Bulletin about the new company's A$150 million, three-year road map to success.

Armour Break

Armour, a company originally founded in 2009 to pursue an exploration and divestment strategy, struggled to realise the full potential of the decommissioned Kincora gas project after acquiring it from Origin in 2016.

After the first full year of operations at the Kincora Gas Plant in the financial year 2019-2020, the project experienced consistent production declines.

Kincora's average gas production plummeted from 9 Tj per day in FY 2019-2020 to 3.8 Tj per day in FY 2022-2023. Oil and condensate production, meanwhile, roughly halved from a little more than 154 barrels per day to just over 77 bpd.

Lange said his appointment as Armour's CEO in July 2022 came with a mandate to solve Kincora's collapsed production. This collapse, he explained, was the result of the company's lack of experience with production plays.

Lange said: "Not a great deal of capital was injected into Armour's production licences — the last new well drilled on Kincora was in 2019. This goes a long way to explaining why production has declined there in recent years."

The problem Lange faced in turning things around at Armour, however, boiled down to a lack of available funding. The executive said: "Having a recovery plan still requires upfront capital, which was a persistent challenge at Armour."

Despite managing to bring Kincora back onstream, Armour recorded millions in annual losses each year. Its worst was its final financial year, with the company posting a A$21.66 million loss in FY 2022-2023.

Despite the sizable shadow that Armour's past difficulties cast, Lange is confident that ADZ's more robust financial footing will allow him to deliver on the development plan he and his team initially devised while at Armour, showcasing the assets' full potential in the process.

Three-Phase Development

ADZ's investment plan for 2024-2026 amounts to around A$150 million, divided across three equal tranches of A$50 million.

Shareholders are expected to fund most of the company's first-year activities, with second-year funding coming from a mix of cash flow and shareholder investment. ADZ hopes to have boosted production enough for cash flow to cover its capital and operational expenditures in the third year.

The first year of investment will be solely devoted to turning Kincora's production around, with ADZ aiming to boost output to 20 Tj per day by the end of 2025. Lange said: "In the first 12 months, which will likely spill over into 2025, because we've had a delayed start to the year, we expect to drill four to five wells at Kincora and conduct a 3D seismic survey."

ADZ anticipates expanding the Kincora gas processing plant from 20 Tj to 30 Tj per day, though this is a longer-term priority. While Kincora "can wash its own face" in terms of covering operational expenses, ADZ needs the project to cover development costs at its other projects.

Lange said: "We have two levers to ensure the project can do that: production and price. When [Armour] renegotiated the price of the GSA with Shell last year, we pulled the price lever. Now it's a matter of boosting production, and increasing the plant's capacity to 30Tj per day is part of our longer-term asset strategy, with that investment underwritten by cash flow."

He added: "We'll continue focusing on boosting Kincora's production in 2025 but hope to widen our focus to our Otway and MacArthur assets that year. From 2026, we expect to have more investment capacity for non-core projects."

ADZ wants to drill its first well on PEP 161 in Victoria's Otway Basin, which it owns 51%, by 2026. The company estimates the Enterprise North conventional gas prospect could hold hundreds of billions of cubic feet of gas and associated condensate.

The project's "quick path to commercialisation" has excited the management team. ADZ has three nearby gas processing plants — Lochard Energy's Iona Gas Plant, Beach Energy's Otway Gas Plant or Cooper Energy's Athena Gas Plant — the project can potentially tie into.

After its Victorian drilling plans, ADZ is set on testing the Glyde discovery in the Macarthur Basin. Glyde is a shallow conventional gas discovery that flowed at 3.3 million cubic feet per day without fracking. However, the company's modelling suggests the discovery could flow up to 6.2 mmcf per day. 

Armour signed a heads of agreement (HoA) with Lucapa in February 2023 to supply gas from Glyde to the Merlin diamond mine for around 14 years from mid-2025. The mine lies around 20 km from the gas field.

Lange said: "After [Glyde], comes the Cooper Basin and revisiting Armour's original game plan of derisking plays to drive value for farm-in opportunities. We'd much rather derisk these assets before going to the market. Despite the size of the opportunity, without a discovery in hand, we'd likely only end up with a cheap deal."

Beyond its immediate plans for the drill bit, however, the company is also conducting a strategic review of many of its exploration assets to trim the fat.

Strategic Review 

While Lange stressed the company was not looking to exit any states, he noted that the portfolio had reached an unmanageable size.

The executive said: "Armour built up a huge portfolio of assets, far larger than it could fund. Holding tenure costs money. I'm currently carrying out a strategic review of ADZ's exploration assets in Queensland, South Australia and Northern Territory as I'm not convinced of the economics of such a large holding."

ADZ holds interests in 12 PLs, six ATPs and two PCAs in Queensland, two PEPs in Victoria, six EPs and seven EPAs in the Northern Territory, and three PELs and 27 PRLs in South Australia.

ADZ's acquisition of Armour's assets marks a turning point in the trajectory of these resources. With a fleshed-out recovery roadmap, robust investment plans and a focus on operational efficiency, ADZ is poised to revitalise production.

The year ahead for the company will serve as a litmus test for the management team's development plans. Can ADZ Energy's strategic vision overcome past challenges, paving the way for tangible upstream gains? Time will tell.

Source: Energy News Bulletin

Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) is pleased to announce that the Beetaloo Joint venture has signed a Binding Agreement for a long-term Gas Sales Agreement to supply the Northern Territory Government (Buyer) with 14.6 PJ (13.8 BCF) per annum from the proposed Shenandoah South Pilot Project for an initial term of nine years, with a Buyer’s option to extend for a further six-and-a-half years.

To view the full press release, click here.

Source: Falcon Oil & Gas Ltd

The Territory Labor Government is securing power for years to come by purchasing gas from the Beetaloo Basin for electricity generation, and backing the growth of the Territory’s on-shore gas industry.  

The gas arrangements, between the Territory Government and Tamboran Resources, will provide competitively priced gas for the Territory’s electricity generation.

Once Tamboran secures access to the necessary pipelines and receives all required permits and approvals, supply to the Territory Government becomes unconditional.  

This historic deal ensures that Territory residents, businesses and industry will share in the benefits of our growing on-shore gas industry by delivering cleaner and more affordable natural gas for power generation.

The first gas from the Beetaloo Basin that will be delivered to Territory power generators is expected in the first half of 2026.

The deal will provide gas to Territory power generators for nine years with an option to extend for another six-and-a-half years.

It comes as Tamboran Resources is working towards reaching a Final Investment Decision on its 40 TJ/d pilot project by mid this year – which is a key milestone in the development of the Beetaloo Basin and growing the Territory’s on-shore gas industry.

Developing the Beetaloo Basin and boosting our on-shore gas industry will create thousands of work opportunities for Territorians and boost the economy by $17 billion.

Quotes attributable to Chief Minister Eva Lawler:

“We’re backing the industries that get the Territory working – and that’s why my Government is supporting the on-shore gas industry.”

“My common sense plan will make sure that the benefits from Territory gas are spread right across the Territory for local residents, businesses and industry.

“By making sure that Territory gas powers our electricity generators we are powering the Territory’s future for years to come.”

Quote attributable to Minister for Mining Mark Monaghan:

“The Territory is on the cusp of becoming an energy powerhouse and we will make sure that Territorians share in the huge benefits to come from growing the on-shore gas industry.”

Quote attributable to Minister for Essential Services Kate Worden:

“We’re focused on making sure we have environmentally sustainable, stable and affordable power for Territorians and Territory businesses – and that’s exactly what this agreement does.”

Quotes attributable to Managing Director and CEO of Tamboran Resources, Joel Riddle:

“We are proud to deliver on our commitment to provide the Northern Territory Government with long-term supply of gas from the Beetaloo Basin. Tamboran has always promised that our first gas production from the Basin would be to the benefit of Territorians and we are excited to play our part in boosting energy security in the Northern Territory.

“This is a transformational development for Tamboran and our partners, after 10 years of hard work and more than A$500 million invested in Beetaloo exploration and appraisal activities. This represents a major milestone and puts Tamboran on a path where revenue from gas sales will support funding our future development phases, including supply to the East Coast and LNG gas markets.

“The proposed Pilot Project is expected to provide initial royalties to both the Northern Territory Government and Traditional Owners within the region.”

Source: Northern Territory Government newsroom

Highlights

• Tamboran and the Beetaloo Joint Venture (BJV) have signed a binding long-term Gas Sales Agreement (GSA) to supply the Northern Territory Government (the Buyer) with 40 TJ per day (~19 TJ per day net to Tamboran) from the proposed Shenandoah South Pilot Project for an initial term of nine years (131.4 PJ Total, ~62.4 PJ net to Tamboran), starting in H1 2026. The Buyer has an option to extend the GSA for a further six-and-a-half years through to 2042.

• The daily volume under the GSA represents approximately two-thirds of the Northern Territory’s current gas requirements.

• Gas will be delivered to the APA-owned Amadeus Gas Pipeline (AGP) on a take-or-pay basis at a market-competitive gas price, escalating at 100% of the Consumer Price Index (CPI). The Buyer’s extension option is at a slightly discounted price.

• The binding supply commitment is conditional on the BJV entering into a binding Gas Transportation Agreement with APA on the proposed Sturt Plateau Pipeline, a binding Gas Processing Agreement for the proposed Sturt Plateau Compression Facility, reaching a Final Investment Decision (FID), and receiving key regulatory and stakeholder approvals.

• Tamboran will be targeting FID on the proposed Shenandoah South Pilot Project in mid-2024, with first production planned by H1 2026.

• Tamboran holds a 47.5% working intertest in the 51,200-acre area that will include the wells required to deliver the proposed Pilot Project volumes.

To view the full ASX announcement, click here.

Source: Tamboran Resources

The premier industry event has just inaugurated a new award, adding to its long list of recognition for the women who makes the industry diverse and unique.

The Women in Industry Awards recognises outstanding women from a range of industrial sectors.

Brace yourselves for the Women in Industry’s brand-new award, aptly named ‘Excellence in Energy’, sponsored by Energy Today, The Australian Pipeliner and ecogeneration.

This category recognises an individual who has made a positive contribution to the renewables, pipeline or oil and gas industries.

This is a unique opportunity to nominate women who have contributed to the energy sector, both at a company level and wider industry level.

To be worthy of this prestigious award, the candidate will have driven initiatives and championed changes, as well as demonstrated leadership across the renewables, pipeline, electricity, or oil and gas industries.

With this new award, the premier event now comprises of 12 categories, including: Business Development Success of the Year, Excellence in Construction, Excellence in Energy, Excellence in Engineering, Excellence in Manufacturing Excellence in Mining, Excellence in Transport, Industry Advocacy Award, Mentor of the Year, Rising Star of the Year, Safety Advocacy Award, and last but not least, Woman of the Year.

Business Development Success of the Year

This category recognises an individual who has created new growth opportunities that has allowed their organisation to expand and generate greater revenue.

Excellence in Construction

This prestigious category singles out an individual who has made a positive contribution to one of the many facets of the construction industry.

Excellence in Engineering

This category recognises an individual who has shown leadership in engineering, technological excellence and innovation.

Excellence in Energy

This award puts the spotlight on an individual who has made a positive contribution to the renewables, pipeline, electricity, or oil and gas industries.

Excellence in Manufacturing

This award is about recognising an individual who has thought ‘outside the box’ to implement an outstanding personal contribution to their manufacturing business and the wider manufacturing community.

Excellence in Mining

This award singles out an individual who has made a positive contribution to one of the many facets of the mining industry.

Excellence in Transport

This award is all about recognising an individual who has gone above and beyond to improve and positively impact the Australian transport industry.

Industry Advocacy Award

This category is about singling out an individual who has helped shape a positive view of their industry and/or helped to create a policy change that benefits those working in the sector.

Mentor of the Year

The industry wouldn’t be the same without mentorship, which is about guidance and sharing knowledge.

Rising Star of the Year

This is about recognising an individual who has shown significant promise within their chosen industry or who has reached new goals at the start of their career.

Safety Advocacy Award

Better safe than sorry. This category recognises an individual working actively to improve safety for their industry.

Woman of the Year

We are seeing more incredible women take charge within the sector and feel it is appropriate to recognise them accordingly. This prestigious award is about them, and how our industry is changing for the best thanks to their contribution.

Nominations are ongoing until 17 May, 2024. Seize the opportunity to nominate yourself or someone else. Submit your nomination now and don’t miss out!

This year’s event will be hosted in Sydney on Thursday, 20 June.

Seven sponsors have been confirmed for the 2024 awards including Atlas Copco, COG Advertising, Fulton Hogan, Komatsu, PACCAR Australia, SEW EURODRIVE and Kenter.

With 12 categories available for sponsorship, there are numerous benefits to securing sponsorships.

Source: Energy Today 

262 km pipelay almost complete off north coast of Australia

Major offshore pipeline specialist Allseas has achieved a major milestone in its installation work for Santos' Barossa gas field development off the northern coast of Australia.

After nearly a year's delay due to legal issues, Santos says the critical installation of the 262-kilometre Barossa natural gas pipeline is almost complete.

One of the key components of the Barossa Export Pipeline Engineering, Procurement, Construction and Installation (EPCI) Contract awarded to Allseas back in 2019 was the installation of a record-sized PLET - the end or termination of a pipeline.

Massive piece of kit

Allseas reported in an announcement this week that its specialist pipelaying vessel "Audacia" has now successfully installed her largest-ever PLET in S-mode, concluding several years of in-house engineering, fabrication and testing.

The pipeline end termination structure is so heavy, production crew had to install it separately to the connector head. It is so tall and wide, it only just fit through the tensioners and over the vessel's stinger.

That operation is a major part of the final stages of the installation of the Barossa gas pipeline, which was severely delayed by legal challenges from Tiwi Islanders.

Barossa back on target

Speaking at Santos' annual general meeting on April 11, chairman Keith Spence told shareholders pipelaying is nearing completion, while CEO Kevin Gallagher said the Barossa gas project itself is more than 70% complete.

Spence also revealed that the first Barossa well has been completed, with initial flow rates in line with expectations and carbon dioxide content at the low end of the expected range.

Santos is currently drilling the second of six Barossa wells.

Installation of the project's subsea facilities installation is well under way, while 13 of the 16 topside modules have now been installed on the floating production storage and offtake (FPSO) vessel.

The Barossa LNG project is designed to utilise existing infrastructure at Darwin LNG to deliver a new supply of gas to Japan and Korea.

At full production rates, Barossa is expected to add 1.8 million tonnes per annum to Santos' LNG portfolio.

Gallagher also noted that Santos continues to pursue its Bayu-Undan carbon capture and storage project, which would safely and permanently store up to 10 million tonnes of CO2 per year, including CO2 from the Barossa gas project.

Source: Energy News Bulletin

The Territory Labor Government is focused on growing our economy and natural gas is a key pillar in our comprehensive plan.

Today, announced on the ASX, Empire Energy has successfully raised over $46 million enabling them to progress drilling in the Beetaloo Sub-Basin for natural gas. 

The drilling will comprise of a pilot development well for pre-production testing. Empire Energy is anticipating commencement of commercial production by 2025 with the first supply of natural gas going into the Northern Territory Market.

This announcement highlights international confidence in the Beetaloo Sub-Basin and in the Territory’s economy moving forward, with an estimated $17 billion increase in economic activity through the Beetaloo Sub-Basin alone.

Natural Gas will facilitate working opportunities for thousands of Territorians, boost local businesses and secure precious energy supplies.

This comes as the Territory Labor Government announced $2 million per year securing our natural gas industry through a regional monitoring program in the Beetaloo Sub-Basin. This investment ensures the strongest environmental safeguards based on data collected through the Beetaloo Sub-Basin SREBA are maintained.

Quotes attributable to Chief Minister, Eva Lawler:

“Today’s announcement by Empire is fantastic news for jobs, fantastic news for our economy and fantastic news for the future of the Territory.

“I am focused on getting Territorians working and as we continue to grow this critical sector, more and more opportunities become available for Territorians to secure stable employment.

“The Northern Territory will be at the forefront of natural gas production, and we will be the jurisdiction to deliver cheaper, cleaner and more reliable energy to the rest of Australia."

Quotes attributable to Minister for Mining, Mark Monaghan:

“The Territory Labor Government’s focus is to grow our economy, create working opportunities for Territorians and transition to a cleaner future, and this announcement by Empire Energy provides great confidence in all three.

“Only last week the Lawler Government announced funding to implement the regional monitoring program in the Sub-Beetaloo Basin, ensuring all progress made is underpinned by strong environmental safeguards.”

Quotes attributable to Empire Energy Managing Director Alex Underwood:

“The Empire team is grateful for the support of leading US shale gas players Bryan Sheffield and Liberty Energy, alongside existing and new shareholders, in this capital raise.

“Bryan and Liberty have a proven track record of responsible development and value creation.

“The proceeds of this raise will be deployed in the further development in the Beetaloo Basin, in activities supporting NT businesses and local job creation.

“We appreciate the support of the NT Government to facilitate our activities, and we are committed to sustainably developing the Beetaloo’s substantial natural gas resources.

“Successful development will enhance the energy security of the NT, as well as potentially putting downward pressure on gas prices, and in the longer term create new supply for eastern Australia and our export markets in Asia.”

Source: Northern Territory Government newsroom

Central Petroleum has established a share sale facility for holders of small parcels of Central’s shares.
 
Shareholders who held less than 8,333 Central shares as at 16 April will soon receive information regarding the operation of the share sale facility. Holders of small parcels will have until 5 June 2024 to notify Central if they wish to retain their shares.
 
To read the full release, click here.

Source: Central Petroleum

• Commitments received from existing and new institutional and sophisticated investors for a strongly supported two-tranche placement to raise $39 million

• Bryan Sheffield and Liberty Energy Inc (NYSE: LBRT) (“Liberty Energy”) have demonstrated their support for Empire with each investing US$5 million (~A$7.7 million) in the placement

• Daly Waters, a subsidiary of Formentera Partners (a US based private equity firm founded by Bryan Sheffield) and Liberty Energy have each independently acquired a 2.25% royalty interest in EP187 for US$2.5 million (~A$3.9 million) raising an additional US$5 million (~A$7.7 million)

• Empire is now funded to drill a 3km fracture stimulated horizontal pilot development well in EP187 and to further progress engineering and preparation for installation of Carpentaria Pilot Project surface facilities

• Empire anticipates commencement of commercial production and gas sales in 2025

• Empire Directors have demonstrated their continuing support for Empire by committing to invest an additional $325,000 (subject to shareholder approval)

Click Here to view the full ASX Announcement 

Source: Empire Energy Group

Key industry leaders and representatives from Australia, Japan, the Republic of Korea and the United States will gather in Darwin over the next two days to discuss critical mineral production, supply chain resilience and economic security. 

A huge driver of the economy, the total value of mineral production in the Northern Territory was $4.86 billion last year, with 4,400 people employed within the industry.

Demand for these critical minerals is projected to rapidly grow with the increasing transition to renewable energy and battery storage, along with the crucial role of these minerals in areas such as medicine and defence.

The Darwin Dialogue’s mini-lateral and bilateral cooperation on critical minerals and rare earths highlights the opportunities and strategic importance the Northern Territory will play in the critical minerals supply chain for Australia and global partners.

This summit highlights the opportunities and strategic importance the Northern Territory will play in the critical minerals supply chain for Australia and global partners.

The demand for critical minerals is expected to continue to grow to support renewable energy, battery storage and high-technology industries.

This presents significant economic and strategic opportunities for the NT to become a reliable supplier of minerals to support the transition to a decarbonised economy.

The Darwin Dialogue is convened by the Australian Strategic Policy Institute (ASPI).

Quotes attributed to Chief Minister Eva Lawler:

“The Territory Labor Government is creating the working opportunities of the future.”

“The Darwin Dialogue 2024 is an exclusive Track 1.5 initiative that brings together 60 leaders and key representatives from Australia, Japan, the Republic of Korea, United States, UK and India to discuss critical mineral production, supply chain resilience and economic security.” 

“The Territory is a key player when it comes to the global supply chains for the critical minerals required for new technologies and the energy transition. This summit cements our position on the national stage.”

Quotes attributed to Minister for Mining, Mark Monaghan:

“The Territory Labor Government will always back projects that get Territorians working.”

“It is clear that the demand for critical minerals is driving this growth in exploration, and as it stand over 4400 Territorians work within the minerals industry.”

Quotes attributable to Dr John Coyne, Head of the Northern Australia Strategic Policy Centre, ASPI:

“ASPI is proud to convene the Darwin Dialogue in the Northern Territory. Darwin and the INPEX Ichthys project provides the perfect backdrop for a dialogue on critical minerals, illustrating what is possible when like-minded countries like Japan and Australia work together.

“The Darwin Dialogue's diverse attendees provide an unprecedented opportunity for open discussion on creating competitive and resilient alternate critical minerals supply chains that commit to the highest ESG standards.”

Source: Northern Territory Government newsroom