Echelon Acquires EP145 Permit Adjacent to Mereenie Gas Field with 5% Royalty
Echelon Resources has agreed to acquire full ownership and operatorship of the EP145 exploration permit in the Northern Territory’s Amadeus Basin, aiming to unlock a discovered gas resource with modern technology.
- Binding Term Sheet executed with Mosman Oil & Gas for EP145 acquisition
- 100% interest and operatorship secured for AUD 400,000 cash
- 5% royalty on helium and hydrogen production included
- EP145 adjacent to Mereenie Gas Field with existing gas discovery
- Acquisition subject to FIRB and regulatory approvals
Strategic Acquisition in the Amadeus Basin
Echelon Resources Limited (ASX: ECH) has taken a decisive step to bolster its Northern Territory gas portfolio by signing a binding Term Sheet to acquire a 100% interest and operatorship in Exploration Permit EP145 from Mosman Oil & Gas. The permit lies in the Amadeus Basin, a region where Echelon already operates key assets including the Mereenie, Palm Valley, and Dingo gas fields.
The purchase price is AUD 400,000 in cash, complemented by a 5% royalty on helium and hydrogen production. This modest upfront cost belies the potential value of the permit, which is strategically located adjacent to the established Mereenie Gas Field and benefits from existing infrastructure.
Unlocking a 'Sleeper' Gas Resource
EP145 holds a legacy gas discovery from the early 1980s, notably the West Walker 1 well, which tested gas-bearing sands in the Pacoota Sandstone, the same producing reservoir as Mereenie, at a rate of 3 million standard cubic feet per day. Echelon’s management describes the permit as a “sleeper” with significant upside, given the combination of known geology, proximity to infrastructure, and strong local gas market demand.
Chief Executive Andrew Jefferies emphasized the role of modern seismic technology and recent underbalanced drilling experience at Mereenie as critical tools to delineate and develop the resource efficiently. The goal is to rapidly bring gas from EP145 into the Northern Territory’s industrial and residential markets, which currently face robust pricing conditions.
Regulatory and Market Considerations
The acquisition remains subject to customary conditions, including approval from the Foreign Investment Review Board (FIRB) and other regulatory bodies. While these approvals introduce some uncertainty around timing, the strategic fit and relatively low acquisition cost suggest Echelon is positioning itself to capitalize on near-term exploration and production opportunities.
With the Northern Territory gas market experiencing strong demand from mines, smelters, power stations, and homes, the addition of EP145 could enhance Echelon’s supply capabilities and market presence. The inclusion of a royalty on helium and hydrogen also hints at potential diversification into emerging energy commodities.
Looking Ahead
This acquisition aligns with Echelon’s broader strategy of leveraging its Australasian asset base and technical expertise to unlock value in underexplored or overlooked permits. The company’s nimble approach and commitment to ethical, values-based development may also appeal to stakeholders increasingly focused on ESG standards.
Investors will be watching closely as Echelon advances seismic surveys and prepares for drilling campaigns that could validate and expand the EP145 resource. Success here could mark a meaningful step in strengthening the company’s production profile and cash flow generation.
Bottom Line?
Echelon’s acquisition of EP145 sets the stage for a potentially transformative exploration campaign in a high-demand gas market.
Questions in the middle?
- What is the timeline and likelihood for FIRB and regulatory approvals?
- How will modern seismic and drilling techniques improve resource estimates at EP145?
- What impact will the 5% helium and hydrogen royalty have on project economics?
