Talon Energy granted production licence for WA gasfield

Gas explorer and developer smallcap Talon Energy (ASX:TPD) received approval from the WA Government to commence production at its Walyering gasfield project in the Perth Basin on Thursday. 

Production Licence L23 (PL23) was given to the executive teams of both Talon Energy and operating partner on the project, Strike Energy (ASX:STX). 

Talon holds a 45% interest while Strike retains operating interest of 55%.

All in all, Talon’s Hauser sees cashflow on the horizon.  

“Talon is pleased with the progress of the project to date, and we look forward to welcoming the near-term free cashflow generated from production of the field,” he added. 

"The timing of this new gas production is critical to Western Australia with several usual supply sources currently shut in or producing below nameplate capacity," Strike Energy boss Stuart Nicholls observed. 

“With the gas sales agreement recently finalised, the project continues to complete major milestones at pace. The grant of the Walyering Production Licence is a key approvals milestone in Walyering’s development pathway,” Talon chief Colby Hauser said. 

Talon Energy recently minted a deal with Santos (ASX:STO) to provide the latter with natural gas for 5 years from the development. 

On a take-or-pay basis, Santos will offload 36.5PJ of gas from Walyering into 2028. 

Upstream facility nearing completion 

Materials needed for the construction of an upstream facility on-site continue to be procured by the company, a process Talon describes at 98% complete. 

Offsite fabrication of metallic structures the partnership describes as 65% complete with start up of the facility still tipped to occur before Q2 of the calendar year. 

“With the gas sales agreement recently finalised, the project continues to complete major milestones at pace. The grant of [PL23] is a key approvals milestone in Walyering’s development pathway,” Hauser said. 

Workover rig completion in February 

A workover rig (a specialised drill rig designed to prepare already-drilled wells for production) will complete the Walyering-5 and Walyering-6 wells next month to ready the assets.

A sliding sleeve, which is ultimately a specialised pipeline that connects two wells together allowing for the control of downhole pressure between both assets, is also on-site ready for installation using the workover rig. 

Solar panels are also expected for delivery at the Walyering facility in the coming weeks which it is intended will primarily power the facility.

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