Key Petroleum Faces Funding Crunch as PCA Deadlines Loom

Strategic Progress in Queensland’s Cooper Eromanga Basin

Key Petroleum Limited has reaffirmed its commitment to advancing its core assets in the Cooper Eromanga Basin, Queensland, by pursuing Potential Commercial Area (PCA) applications over ATP 920 and ATP 924. These applications, due by 28 February 2025, are critical for maintaining tenure and unlocking the commercial potential of these strategically located permits near key infrastructure such as the Carpentaria Gas Pipeline.

The company’s technical reviews have highlighted promising resource potential. ATP 920’s Cuddapan-1 well confirmed recoverable oil, with significant shows in the Cadna-Owie Formation and additional indications in multiple geological sequences. Notably, the Meeba Oil Trend within ATP 920 offers a substantial opportunity, including the Ace Lead anticline, estimated to hold around 10 million barrels of oil.

Gas Potential and Exploration Upside in ATP 924

ATP 924’s geological studies have identified the Permian Toolachee Formation as a primary gas target, with prospects such as Alfajor, Afghan, and Bobcat showing commercial gas potential. The presence of large undrilled subsurface structures further enhances the prospectivity of this permit. Securing a 15-year PCA grant would provide the necessary tenure security to advance exploration and development activities.

Financial Maneuvers and Leadership Changes

Despite a tight cash position of A$187,000 at quarter-end, Key Petroleum successfully completed a capital raise of A$255,000 through a placement to China Create Capital Holding Group Co Limited. These funds are earmarked for advancing Cooper Eromanga Basin projects, assessing new ventures, and bolstering working capital. The company also undertook a share consolidation, reducing the total issued shares significantly to enhance per-share asset value.

Leadership changes include the appointment of Mr. Wei Jin as Executive Chairman and Ms. Yuqi Cao as Executive Director, bringing extensive experience in resources and energy sectors, particularly with ties to both Australian and Chinese markets. The resignation of former Non-Executive Chairman Mr. Quan (David) Fang was also announced, with the board expressing appreciation for his contributions.

Navigating Regulatory and Market Challenges

Key Petroleum’s proactive engagement with the Queensland Government and the Department of Resources underscores its strategic approach to regulatory challenges. The company is preparing for follow-up exploration programs pending PCA approvals and is actively seeking to expand its asset portfolio to ensure sustainable growth. However, the limited cash runway, estimated at just over one quarter based on current expenditure, means that further capital raising will be essential to maintain momentum.

Payments to related parties, including directors’ fees and consulting, amounted to A$89,000 during the quarter, reflecting ongoing corporate governance and operational costs. Exploration and evaluation expenditure remained minimal at A$2,000, consistent with the company’s cautious spending approach.