Australian Oil Co (ASX:AOK) reports CityGate gas prices above US$3 per MMBTU and Rec Board Wells restored to production
Australian Oil Co has advised that gas prices at CityGate have exceeded US$3 per MMBTU, resulting in breakeven and, in select periods, positive cash flow from its Californian operations.
The company has also confirmed that scheduled maintenance works on the Rio Vista pipeline infrastructure have been completed, with Rec Board-7 and Rec Board-8 wells restored back into production.
Highlights
Gas prices at CityGate have risen above US$3 per MMBTU, resulting in breakeven or positive cash flow for operations.
Maintenance on the Rio Vista pipeline infrastructure has been completed, with Rec Board-7 and Rec Board-8 wells restored back into production.
The company is assessing commercial arrangements for the reinstatement of VBC wells via pipeline infrastructure alongside CRC wells.
Australian Oil Co has a portfolio of natural gas and oil producing wells in California and is focused on conventional oil and gas exploration and production opportunities in the Surat Basin.
Australian Oil Co said gas prices at CityGate exceeded US$3 per MMBTU at the start of the month, resulting in the achievement of breakeven and, in select periods, positive cash flow from its operations in California.
The improvement in market dynamics was attributed to upward pressure on local gas prices and increasing demand.
Following notification from California Resources Corporation, scheduled maintenance works on the Rio Vista pipeline infrastructure were completed.
Rec Board-7 and Rec Board-8 wells have since been restored back into production, with gas rates and stabilised rates to be provided to the market shortly.
Australian Oil Co stated that the completion of the infrastructure works positions the company to benefit from increased volumes and favourable pricing going forward.
The completion of the infrastructure works positions Australian Oil Co to benefit from increased volumes and favourable pricing going forward, with the increase in gas prices and plant availability expected to materially strengthen cash flow across its Californian assets.
Australian Oil Co is also progressing discussions and technical reviews aimed at reinstating its VBC wells, with plans to connect these resources back into its company owned pipeline infrastructure alongside the ongoing operations of CRC wells.
Australian Oil Co Managing Director Kane Marshall said:
“The return to positive cash flow marks a significant turnaround for our Californian operations. Higher gas prices, combined with restored production from Rec Board-7 and Rec Board-8, provide a solid platform for further development. Our focus remains on capitalising on these market conditions by optimising production and infrastructure, both through our existing assets and future prospects with the VBC wells.”
Australian Oil Co is an Australian based energy company focused on under-explored, high quality oil and gas opportunities near under-supplied markets.
The company is currently focused on conventional oil and gas exploration and production opportunities in the Surat Basin in Australia and other opportunities, while also holding a portfolio of natural gas and oil producing wells in California.
Australian Oil Co has stated that it is currently evaluating the acquisition of additional producing and exploration assets aligned with its strategic objectives and commitment to delivering shareholder value.