Talon Energy Ltd (ASX:TPD) and joint venture (JV) partner Strike Energy Limited have inked a condensate processing and liquids aggregation agreement with Australian oil and gas giant Santos Limited.
The two companies will process and sell condensate produced from the Walyering gas fields in Western Australia. A 55% interest in the gas field is held by operator Strike Energy, with the remaining 45% held by Talon Energy.
The companies say the high quality of Walyering condensate will garner a premium price on the Brent crude oil market, forecasting gross annual revenue in excess of A$10 million from a 250 barrel per day production rate (assuming an average Brent price of US$75 per barrel over the period).
Strike estimates the by-product will reach a breakeven price of US$45-60 per barrel, providing a solid revenue and profit stream.
Walyering gas fields
Exploration Permit 447 sits within the Walyering gas fields, which holds a gross 2P Reserve of 54.2 petajoules (gas) and 0.55 million barrels (condensate), a 2C Contingent Resource of 31.9 petajoules (gas) and 0.31 million barrels (condensate) and a 2U Prospective Resource of 15.9 petajoules (gas) and 0.16 million barrels (condensate).
The two JV partners agreed to develop a 33-terajoule per-day and 250-barrel-per-day production facility at the Walyering gas field following the successful appraisal of the field via the Walyering 5 and 6 wells on the permit.
The companies expect to achieve first gas sales shortly with 36.5 petajoules of gas sold to Santos on a firm basis over a period of five years.
The JV partners intend to power their processing facility with solar and battery storage, which will lower the carbon intensity of the site.