Amplitude Energy (ASX: AEL) has commenced flow testing at its Isabella prospect (VIC/L24) following the ST-1 sidetrack, a critical step to determine commercial viability after preliminary wireline data indicated high deliverability and low CO2 content.
This test is expected to take approximately two weeks.
Preliminary wireline data from the Waarre C reservoir indicated high deliverability and a low CO2 content of around 5 mol%.
This flow test intends to quantify the minimum gas volume and reservoir pressure at Isabella, aiming to de-risk its commercial potential.
A final development decision will follow the test results. If the results are not commercially viable, the well will be plugged and abandoned.
Isabella Well Intersects Gas
Earlier this month, Amplitude Energy reported that the ST-1 sidetrack at Isabella had intersected a gas-bearing Waarre C reservoir. The intersection showed 8.2 m of net pay and 10.7 m of gross pay.
The tested interval was between 1905.6 and 1916.3 m measured depth.
Preliminary gas readings and elevated resistivity were aligned with the presence of hydrocarbons.
The company, as operator with a 50% working interest alongside partner OG Energy, stated that further wireline logging, pressure data, and gas composition analysis would be conducted.
These results will inform decisions regarding potential subsea completion and flow testing.
ECSP Gas Sales Agreement
Amplitude Energy and OG Energy have executed a binding Foundation Gas Sales Agreement, known as a GSA, with EnergyAustralia.
This agreement covers the supply of 30 PJ of gas over a four-year term from the East Coast Supply Project (ECSP).
Deliveries from the ECSP are targeted to commence in the second half of 2028.
The agreed price for the gas is fixed, subject to annual CPI escalation.
This GSA is conditional on the successful drilling of the ECSP and a Final Investment Decision, or FID, for the project's development.
Key Investor Considerations
The results from the Isabella flow test are paramount for Amplitude Energy, as they will directly determine the prospect's commercial viability and its potential for near-term development.
Significant execution risk remains for the East Coast Supply Project.
The ECSP's progression, including successful drilling and securing a Final Investment Decision, is fundamental to fulfilling the EnergyAustralia GSA.
Amplitude Energy also navigates inherent risks common to the energy sector, including commodity price fluctuations and the need for various project approvals.
Outlook Hinges on Isabella and ECSP Milestones
Amplitude Energy's immediate future rests on the outcome of the Isabella prospect's flow testing, which will dictate its commerciality.
Success here, coupled with progress on the ECSP development, is critical for leveraging the executed gas sales agreement with EnergyAustralia.
