Rawson Oil and Gas signs Gas sale MOU with Weston Energy

Rawson Oil and Gas Limited “Rawson” has announced that it has executed a non-binding Memorandum of Understanding (MOU) with Weston Energy Pty Limited to sell gas from the Nangwarry-1 exploration well in the Otway Basin, South Australia in the event of a commercial discovery.

The MOU represents a significant step towards signing a binding Gas Sales Agreement (GSA) between the two parties and covers the purchasing by Weston Energy of up to 4 PJ of gas per year for a period of five years. A future binding GSA is subject to a number of conditions, including success at Nangwarry-1 and Weston Energy finalising gas transportation arrangements.

The MOU also provides for Weston Energy making a prepayment of up to A$6 million, which will give Rawson additional financial flexibility to execute future field development activities. The MOU will allow Rawson to quickly convert any discovered resource into reserves and production.

The Nangwarry-1 exploration well is located 9 km south of the recent Beach Energy Discovery at Haselgrove-3 ST11, and only 4 km from an existing gas pipeline which is currently mothballed. An independent petroleum engineering firm has assessed the best estimate prospective resources of the Nangwarry-1 prospect at 57 billion ft³.

Weston Energy already has a number of gas customers in South Australia, success at Nangwarry-1 willsee the parties working closely together to sell more gas into the South Australian market in keepingwith the terms of the South Australian Government PACE Grant recently awarded to Rawson and it’s PEL 155 Joint Venture Partner Vintage Energy.

Allister Richardson, Chairman of Rawson Oil and Gas commented: “We are delighted to have executed this MOU with Weston Energy. In the event of success at Nangwarry-1 we will have a foundation customer to work with as we sell gas into the South Australian market. Drilling of the Nangwarry-1 well is planned for FY19 and if we find gas we will be working to have the discovery on production as early as possible. With gas pricesin the Mt Gambier area as high as A$15 GJ I am confident that Rawson and Weston can deliver better options for local gas buyers and help build economic prosperity in South Australia.”

Garbis Simonian, Managing Director of Weston Energy added: “Our aim is to support Australian domestic businesses and jobs, and this MOU with Rawson is a significant step in delivering competitively priced contract gas to our industrial and commercial gas customers in South Australia.”

Read the article online at: https://www.oilfieldtechnology.com/special-reports/16072018/rawson-oil-and-gas-signs-gas-sale-mou-with-weston-energy/