PERTH (miningweekly.com) – ASX-listed Queensland Pacific Metals (QPM) has completed the acquisition of the Moranbah gas project, transforming the company into the sixth-largest domestic gas producer on the Australian exchange.
The transaction also transformed the company into a revenue-generating entity with a pathway to positive earnings before interest, taxes, depreciation and amortisation over the next 12 months.
The Moranbah gas project and the North Queensland energy joint venture, collectively known as the Moranbah project, provide QPM with an established coal mine waste gas project with a 240 PJ of 2P reserves and existing infrastructure with a processing capacity of up to 30 PJ/y.
The project has been in production since 2004 with current gas production sourced from approximately 100 operated wells across four petroleum leases and waste mine gas supplied from five active coal mines in the region.
Current production from Moranbah is approximately 10 PJ/y of which 7 PJ/y is sold to ASX-listed Incitec Pivot’s subsidiary Dyno Nobel Moranbah’s ammonium nitrate plant under an existing gas supply agreement.
“We applaud the work over more than one year that has been undertaken by the QPM Energy (QPME) team to complete this acquisition. In doing so, this significantly de-risks our gas supply requirements for the Townsville Energy Chemicals Hub (TECH) project and provides a pathway to create a significant positive cash flow business,” said QPM MD and CEO Dr Stephen Grocott.
“The QPME team led by David Wrench has developed detailed plans to enhance the asset so that it has a pathway to generating positive earnings. On behalf of QPM, I would also like to welcome as new employees the experienced team who have joined the company as part of the acquisition.”
QPM recently flagged a A$24-million capital raise to partly fund production growth at Moranbah over the next 12 months. The company said that in order to achieve increased production, QPM will implement the existing well work programme starting in October, install tie-in points on adjacent Anglo mine sites to capture gas currently being drained and flared, undertake a new well drilling programme under the Dyno Nobel Development Funding Facility, and undertake other infrastructure optimisation activities.