Cooper Basin gas producer Vintage Energy (ASX: VEN) expects the introduction of a new uplift program to result in a significant increase in production from its Vali and Odin fields.

The company is raising $2.1 million via a 1-for-4 entitlement issue at $0.005 per share to overcome mechanical issues at its Vali and Odin fields while targeting an increase in near-term production by tapping into a new gas flow.

The proposed program will aim to increase gas output from the Odin and Vali fields through scale management measures and the addition of gas production from the Toolachee formation at Vali.

Gas flow doubles

Vintage has already seen the benefit of initial measures to remove accumulated scale at the Odin-1 well, with raw gas production from the field increasing from 1.4 million standard cubic feet per day (MMscf/d) to more than 3.0MMscf/d.

The proposed program will install permanent scale management solutions at Odin-1 and the field’s metering apparatus and determine if there are similar opportunities for production improvement at other installations.

Vintage-led joint ventures supply gas from Odin and Vali to Pelican Point Power and AGL Energy (ASX: AGL).

Major production increases

“Our work at Odin-1 in the previous quarter demonstrated the scope of production increase that can be achieved and the clear merit of the project,” managing director Neil Gibbins said.

“Management of scale is simple, low risk and is expected to repay its cost many times over through increased gas sales, cash generation and accurate metering so we receive full value for our gas.”

“We would expect to realise production benefits immediately and higher cash returns on receipt of payment for the first invoice after the work is conducted.”

Ongoing cost reduction

Mr Gibbins said the ongoing program of expenditure reductions that has already yielded substantial savings in corporate and administration costs cash would reinforce the expected increase in gas production from Vali and Odin.

The company expects its recent restructuring to deliver a 41% reduction in employment costs, with savings to emerge from June 2025.

“The production uplift program to be funded by this entitlement offer is undoubtedly in the best interest of shareholders and I encourage all fellow holders to join the board and management in participating.”

Solid quarter

Vintage achieved a 105% increase in sales revenue, with a return of $1.51m for the December quarter attributable to higher gas production during the period and cost-cutting measures.

A $0.39m increase in cash receipts from customers (up 55%) and a 46% ($0.29m) reduction in corporate and administration costs largely accounted for the $0.63m improvement in quarterly outflow from the September quarter.

Lower exploration and staff costs, along with higher production costs, featured in the balance of the change.