Sydney, Australia – Hartshead Resources NL (ASX: HHR), Australian-listed oil and gas exploration and development company, today provided an update on the ongoing development of the Anning & Somerville Gas Fields through its P2607 Joint Venture (JV). Despite the current uncertainties surrounding future fiscal policies, the JV remains steadfast in its commitment to advancing the Phase 1 Gas Field Development, with the 2024 JV budget firmly in place.
In light of the upcoming parliamentary elections in the UK, expected in Q4 2024, Hartshead has been actively engaged in discussions with various political stakeholders to gain clarity on potential changes to the oil and gas fiscal regime. The company emphasizes the importance of establishing a fiscal environment that continues to attract and support investment in the sector.
To mitigate the financial impact of these uncertainties, Hartshead is exploring innovative financing solutions for project infrastructure, aiming to significantly reduce the initial capital expenditure (CAPEX) required. These discussions focus on shifting CAPEX to operational expenditure (OPEX) through tariffs on third-party infrastructure investments, thereby lessening the funding burden on Hartshead.
In a strategic move to preserve its strong cash position, Hartshead has implemented a cost reduction initiative, targeting a decrease in contractor headcount while maintaining a core team to support the JV's ongoing and future development phases. This initiative is expected to result in substantial savings in monthly costs for both the JV and Hartshead directly.
The company also notes the strengthening of UK NBP gas prices to approximately 70p/therm, a positive development amidst the backdrop of a mild winter in Europe and high gas storage inventories.
Chris Lewis, Hartshead CEO, commented: “The Joint Venture continue to work to move our gas development project forward, looking at innovative funding arrangements to potentially reduce up front CAPEX. Discussions with policy makers and other stakeholders have been encouraging and I anticipate that a pragmatic solution exists to enable the continuation of the oil and gas industry in the UK.
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Jane Morgan