Rawson Oil and Gas signs Gas Sale MoU for AU$6-million

Rawson Oil and Gas (ASX:RAW) reports it has executed a non‐binding memorandum of understanding (MoU) with Weston Energy to sell gas from the Nangwarry‐1 exploration well in the Otway Basin, South Australia in the event of a commercial discovery.

Australian-based Rawson Oil and Gas is currently focused on developing under explored regions in Papua New Guinea, as well as continuing to commercialize its existing assets in the Otway Basin.

As quoted from the press release:

The MoU represents a significant step towards signing a binding gas sales agreement between the two parties and covers the purchasing by Weston Energy of up to 4 petajoules 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 finalizing gas transportation arrangements.

The MoU also provides for Weston Energy making a prepayment of up to AU$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 9km south of the recent Beach Energy Discovery at Haselgrove‐3 ST11 , and only 4km 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 cubic feet of gas.

“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 prices in the Mt Gambier area as high as $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,”Allister Richardson, Chairman of Rawson Oil and Gas said.

click here to read the full press release