Echelon’s Cash Balance Climbs 18% as Amadeus Production Hits 4,481 boepd

Strong Operational Momentum in Northern Territory

Echelon Resources Limited closed out 2024 on a high note, with its December quarter marked by significant operational and financial progress. The Mereenie field in the Amadeus Basin was a particular highlight, where the spudding and completion of the West Mereenie 29 (WM29) well exceeded expectations. Coming online in January 2025, WM29 delivered gas at 6 terajoules per day, twice the predrill forecast, signaling robust reservoir performance and validating Echelon's underbalanced drilling approach.

Following WM29, the West Mereenie 30 (WM30) well advanced steadily, having reached 1,151 meters by the end of January and targeting a total depth of 1,674 meters. The well is expected to be completed and tested by February, with gas sales anticipated shortly thereafter. These developments underscore Echelon's commitment to expanding production capacity in the Amadeus Basin.

Enhanced Gas Sales Agreements and Production Growth

Complementing the drilling success, Echelon secured enhanced Gas Sales Agreements (GSAs) with the Northern Territory Government, effective from 1 January 2025. These agreements provide long-term revenue stability and reflect the reliability of Echelon's Amadeus gas portfolio. The GSAs are a strategic win, ensuring a dependable customer base and underpinning future cash flows.

Production receipts from the Amadeus Basin rose by 23% during the quarter, contributing to a total production volume of 412,246 barrels of oil equivalent (boe) and a steady daily output of approximately 4,481 boe. This growth was supported by ongoing optimisation at other fields such as Dingo and Palm Valley, alongside the Mereenie developments.

Financial Strength and Strategic Investments

Financially, Echelon demonstrated solid performance with its cash balance increasing 18% quarter-on-quarter to NZ$46.2 million. Operating cash flow surged 39% to NZ$4.5 million, driven by higher production receipts and disciplined expenditure management. Despite a reduction in investing cash flows by NZ$2.5 million, the company maintained its focus on development activities, including drilling in the Amadeus Basin and Indonesia, as well as well workovers at Maari.

The payment of the final year dividend of NZ$3.7 million was a notable financing cash outflow, reflecting Echelon's commitment to shareholder returns. Additionally, Cue Energy Resources contributed NZ$19 million to the cash balance, reinforcing the group's liquidity position.

Expanding Footprint and Future Outlook

Looking ahead, Echelon is poised for continued growth. The company signed a drilling contract for the Perth Basin's EP437 block, with operations expected to commence in mid-April 2025. The Becos well will be drilled to a depth of approximately 1,140 meters over a two-week period, representing a key exploration and development milestone.

In Indonesia, progress continues on the Mahato PSC with three development wells drilled during the quarter, including the first horizontal well PB-30, now producing over 600 barrels of oil per day. Discussions with the Indonesian government regarding the Sampang PSC extension and Paus Biru project amendments remain critical to unlocking further value.

Meanwhile, in New Zealand, the Kupe field experienced a brief unplanned outage in mid-December but was swiftly restored, maintaining production stability. The Maari field continues steady output, with ongoing well workovers and licence extension applications underway.

Overall, Echelon's diverse asset base across Australia, Indonesia, and New Zealand, combined with operational execution and strategic contract wins, positions the company well for a strong 2025.