Amplitude Energy to Pay $58.3 Million Upfront for Half of Artisan Gas Field

Amplitude Energy Secures Strategic Asset to Accelerate Gas Supply

Amplitude Energy (ASX:AEL) has inked a binding deal to acquire a 50% interest in the Artisan gas field from Beach Energy, paying $58.3 million upfront plus a capped royalty on future production. The transaction, which also brings O.G. Energy in for a 10% stake on identical terms, effectively aligns Amplitude and O.G. Energy as equal partners in Artisan. This acquisition is set to accelerate gas production targets to 2028, leveraging Amplitude’s existing infrastructure for a lower-cost development pathway.

The Artisan gas field, located about 17km southeast of Amplitude’s Offshore Otway Basin pipeline, was discovered in 2021 and holds contingent resources previously reported by Beach Energy. With a production licence granted in 2024, the field is poised for development alongside the East Coast Supply Project (ECSP), a major initiative targeting increased domestic gas supply. The deal is expected to be net asset value (NAV) accretive and earnings accretive from production start, assuming final investment decisions proceed as planned.

Synergies with East Coast Supply Project Enhance Project Economics

The acquisition consolidates discovered gas resources at Artisan and the Annie gas field, which Amplitude secured a production licence for earlier this year, targeting first gas also in 2028. This consolidation strengthens the ECSP economics by de-risking the project and providing a robust base resource. Exploration upside remains with the Juliet and Nestor prospects, which could further enhance returns if successful. The deal underscores Amplitude’s strategy to maximise the value of its existing Otway Basin infrastructure, with the Artisan gas composition compatible with processing at the Athena Gas Plant.

Amplitude expects to move swiftly to a final investment decision on the ECSP development phase in the coming months, with drilling of the Juliet well scheduled for late July or early August. The Artisan development well is already underway, funded and operated by Beach Energy until completion, which is a condition precedent for the acquisition. The Transocean Equinox rig schedule has been amended to prioritise Artisan, followed by Juliet and Annie wells, with the Nestor prospect decision pending joint venture approvals.

Attractive Acquisition Terms and Strong Balance Sheet Support

Amplitude’s upfront cash payment equates to roughly $2 per gigajoule, with a nominal royalty of A$3.75 per GJ on production capped at 31 petajoules net to Amplitude. The acquisition is fully funded through existing sources, allowing the company to maintain a strong balance sheet supported by expected free cash flow generation. The deal includes the purchase of additional subsea infrastructure, such as a subsea tree and wellhead, facilitating a seamless tie-in to Amplitude’s pipeline network.

Managing Director Jane Norman highlighted the cost efficiencies of developing Artisan through Amplitude’s infrastructure, describing it as a “win-win” for all parties involved. The proximity of Artisan to demand centres in Victoria and South Australia reduces transportation costs and supports longer-term offtake confidence. The acquisition also reflects Amplitude’s growing reputation as an operator of choice in the Otway Basin, bolstered by O.G. Energy’s aligned investment.

Production Growth and Market Supply Implications

With the addition of Artisan, Amplitude Energy’s equity production capacity within the ECSP could increase by more than 60%, potentially lifting output from around 75 terajoules per day to over 120 terajoules per day by 2028. This growth trajectory complements existing supply contracts with major east coast buyers such as AGL and EnergyAustralia, both of which have committed to gas volumes contingent on successful ECSP development and exploration outcomes.

This transaction builds on Amplitude’s recent production licence for Annie field, which also targets 2028 production, and follows the company’s record Q3 revenue and ECSP progress earlier this year. Together, these developments position Amplitude as a key player in addressing east coast gas supply challenges amid a tight market.