Gas Sales Agreement for Dart's UK CBM
Dart Energy has announced the signing of a Gas Sales Agreement (GSA) with SSE Energy Supply Limited, in respect of the PEDL 133 coal bed methane project in Scotland.
The GSA is for a 5 year term, commencing April 2013, extendable by mutual agreement and is sized to ensure that Dart is able to deliver all current PEDL 133 2P reserves during the term. There is no minimum delivery requirement.
Dart said that SSE Energy Supply Limited would purchase gas delivered (other than off-specification gas) at a price linked to the prevailing prices in the UK natural gas market. Currently, UK prevailing prices are equivalent to approximately US$11 per MCF. The compnay commented that UK market prices are at a substantial premium to those achievable in Australia for example, and provides Dart with the opportunity for enhanced margin returns compared to other regions.
SSE Energy Supply Limited is a UK FTSE 100 utility with over nine million retail customers, a significant coal, gas and renewables generation business, and 50% ownership of Scotland Gas Networks, the owner and operator of the local gas grid infrastructure that passes both across and proximate to PEDL 133;
An independent assessment by Netherland Sewell & Associates, Inc (NSAI) of the coal bed methane (CBM) within the PEDL133 licence area identified 2P Reserves of 43 BCF, 3P Reserve of 81 BCF and a 2C contingent resource of 607 BCF (as per Dart’s announcement of 22 June 2011). In terms of the development that would be needed to support this GSA (at full volume), Dart Energy estimate that up to 20 wells will be required in the ramp-up to first gas sales, and thereafter 10-12 additional wells each year would sustain production rates.
Source: Dart Energy