Beach Energy selling ownership in Artisan gas field offshore Victoria

Australian gas production company Amplitude Energy has signed a binding agreement to acquire a 50% interest from Beach Energy in the VIC/L35 permit in the offshore Otway Basin.

It contains the undeveloped Artisan gas discovery, drilled by Beach and partner OG Energy in 2021.

Transaction terms and development status

Beach has been using the semisub Transocean Equinox to complete the Artisan development well. Subject to the operation meeting objective well completion criteria and customary conditions, the company will transfer its interest in VIC/L35 to Amplitude and O.G. Otway.

The duo plan to tie production from Artisan through the Amplitude-operated onshore Athena Gas Plant in Victoria. The transaction, valued at $130 million post-tax, should be completed early next year.

Beach reallocates capital from Otway projects

Beach has also decided not to complete the La Bella 2 development well and subsea tie-in to the Otway Gas Plant, redirecting more than $500 million of capital previously estimated for Artisan and La Bella to other projects.

ECSP momentum and operator outlook

“Producing Artisan through Amplitude Energy’s existing infrastructure allows faster and lower-cost development of this gas for the east coast domestic market…

"We expect to rapidly move to FID on the development phase of the East Coast Supply Project [ECSP] over the next few months while the drilling of the Juliet and Annie wells is conducted, with Juliet now brought forward and drilling expected to commence by late July or early August.

“Annie and Artisan together provide the base resource for the ECSP, with project economics potentially further improved by Juliet and/or Nestor discoveries. This transaction provides significant value and optionality for the ECSP and provides customers with certainty in an uncertain market.”

—Jane Norman, Managing Director and CEO, Amplitude Energy

Artisan tieback concept and infrastructure integration

Artisan is 17 km southeast of Amplitude Energy’s existing Offshore Otway Basin pipeline. Development concepts involve a tie-in to the Offshore Otway Basin infrastructure in 2028, in parallel with the ECSP development phase.

According to the company, technical studies suggest Artisan’s gas is suitable for processing through Amplitude’s Athena Gas Plant, along with the Annie discovery and any others from future ECSP exploration.

The field can be tied in to the nearby Casino-Henry-Netherby pipeline via flowlines connecting to existing pipeline tee pieces.

Rig schedule revised for exploration and development campaign

As part of the transaction, the drilling schedule for the Transocean Equinox rig has been amended for the Artisan development well, which started drilling last month, with Beach funding the operation. The agreement remains conditional on the completion of the well with a subsea tree. 

Amplitude should then receive the rig during July-August to drill the Juliet-1 exploration well, followed by the Annie-2 development well.