Why Is Metgasco Selling Its Cooper Basin Gas Fields for $5.9 Million?
Metgasco has agreed to sell its 25% stake in key Cooper Eromanga Basin gas fields to Vintage Energy for $5.9 million, marking a significant shift in its business focus. The deal hinges on Vintage securing funding and acquiring additional interests, with shareholder approval required.
- Sale of 25% non-operated interest in Odin and Vali gas fields
- Conditional $5.9 million consideration payable by Vintage Energy
- Vintage to assume most liabilities including $3.39 million AGL gas prepayment
- Transaction subject to shareholder and regulatory approvals
- Post-sale, Metgasco plans to acquire new assets within six months
Metgasco's Strategic Shift
Metgasco Ltd (ASX, MEL) has announced a conditional agreement to sell its 25% non-operated interest in two producing gas fields within the Cooper Eromanga Basin to Vintage Energy Ltd. The assets involved include stakes in the Odin Gas Field, straddling the South Australia–Queensland border, and the Vali Gas Field in Queensland. This move represents a pivotal moment for Metgasco, which has struggled to generate sufficient cash flow from these assets despite ongoing efforts to boost production.
Deal Details and Conditions
The proposed transaction, valued at $5.9 million, is contingent on Vintage Energy securing adequate funding by late December 2025 and completing the purchase of Bridgeport's 25% interest in the same tenements by February 2026. Vintage will assume most associated liabilities, including a significant $3.39 million remaining gas prepayment obligation to AGL under the Vali Gas Field Gas Supply Agreement. However, certain private royalty obligations linked to Metgasco's director-associated entity will remain with Metgasco.
Completion of the sale requires multiple approvals, including shareholder consent under ASX Listing Rule 11.2, ministerial consents, and third-party agreements. Metgasco’s board has expressed support for the transaction, viewing it as the best path forward given the underwhelming results from their recent Production Uplift Program.
Implications for Metgasco
Following completion, Metgasco will be left without substantial assets or ongoing operations. The company intends to identify and acquire new business opportunities within six months to maintain its ASX listing and financial viability. This turnaround plan underscores the company’s commitment to remaining an active player in the energy sector despite divesting its core gas interests.
The sale proceeds will primarily be used to repay existing debt, notably to Glennon Small Companies Ltd, which currently holds an estimated $5.9 million in royalties owed by Metgasco. Vintage Energy’s assumption of the AGL prepayment liability also alleviates a significant financial burden for Metgasco.
Looking Ahead
The transaction timeline anticipates shareholder approval by late December 2025 and completion in January 2026, subject to the satisfaction of all conditions. Metgasco’s future hinges on its ability to secure new assets and pivot effectively in a competitive market. Meanwhile, Vintage Energy’s acquisition could consolidate its position in the Cooper Basin, provided it navigates the funding and regulatory hurdles successfully.
Bottom Line?
Metgasco’s asset sale signals a major transformation, but its future depends on swift new acquisitions and market confidence.
Questions in the middle?
- Will Vintage Energy secure the necessary funding and Bridgeport’s interest to complete the deal?
- What types of assets or sectors will Metgasco target in its planned acquisitions?
- How will the market react to Metgasco’s transition from producer to asset acquirer?