Amplitude Energy has entered into a binding agreement with Beach Energy to acquire a 50% interest in the Artisan gas field, located within the VIC/L35 permit offshore the Otway Basin in Australia.
Artisan is a proven existing resource in the Otway Basin and will advance the targeted gas production schedule to 2028 through the East Coast Supply Project (ECSP).
O.G. Energy has agreed to acquire a 10% interest in Artisan on identical commercial terms, resulting in Amplitude Energy and O.G. Energy each holding a 50% interest in the asset.
The net acquisition consideration for Amplitude Energy includes an upfront cash payment of A$58.3 million upon completion of the agreement, plus a royalty of A$3.75 per gigajoule (nominal) on its future share of Artisan production, capped at a total of 62 petajoules (representing Amplitude Energy's net share of 31 petajoules).
The Managing Director and Chief Executive Officer stated that this transaction accelerates the development timeline for the Artisan resource and further enhances the economics of the ECSP project.
"Producing Artisan gas through Amplitude Energy's existing infrastructure enables faster and lower-cost development of this gas source for the East Coast domestic market. Artisan's development costs will benefit significantly from leveraging the established ECSP project and our readily available infrastructure. For Amplitude, O.G. Energy, and Beach, this represents a win-win scenario in optimizing their respective Otway Basin portfolio assets."
"We anticipate rapidly advancing the final investment decision for the ECSP development phase in the coming months, alongside drilling operations for the Juliet and Annie wells. The Juliet well has been brought forward and is expected to spud in late July or early August. Annie and Artisan together form the foundational resources for ECSP, while discoveries at Juliet and/or Nestor could further improve project economics. This transaction brings significant value and flexibility to ECSP and provides certainty for customers in an uncertain market."
The current development concept involves tying back Artisan to Amplitude Energy's existing Otway Basin offshore infrastructure in 2028, aligned with the ECSP development phase. Preliminary technical work indicates that Artisan's gas composition is compatible with Amplitude Energy's Athena gas processing plant and can be processed alongside the discovered Annie resource and any other discoveries from the ECSP exploration targets. Key offshore approvals and permits required for the Artisan project are already in place. Project-level approvals for developing the field via Amplitude Energy's infrastructure will be integrated with other ECSP approvals, subject to final investment decision.
Developing Artisan via Amplitude Energy's infrastructure offers significant cost advantages due to its proximity for tie-back to the Casino-Henry-Netherby pipeline. The short tie-back distance, the existence of a pipeline tee, and the ability to use the pipeline ordered for ECSP make integrating Artisan into the existing ECSP development activities feasible.
Incorporating Artisan into ECSP increases the volume of gas available for supply to southern market customers. Its proximity to demand centers in Victoria and South Australia provides higher supply reliability, supports longer-term offtake confidence, and reduces delivery costs by avoiding long-distance transportation.
As part of the transaction, the parties have agreed to modify the Transocean Equinox drilling schedule to bring forward the timing of the Artisan development well. Operations for the Artisan well commenced earlier this month. Beach Energy will fund the Artisan development well and completion operations and will remain the operator during this period, with the sale and purchase agreement conditional on the completion of this well and the installation of the subsea tree.
The adjustment to the drilling schedule is expected to allow Amplitude Energy to receive the Transocean Equinox rig between July and August to drill the Juliet-1 exploration well, followed by the Annie-2 development well. A decision on drilling the Nestor prospect will be made jointly by Amplitude Energy and O.G. Energy at a later date.
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