Metgasco Doubles Odin Gas Revenue Amid 45% Reserves Boost

Strong Production Gains at Odin Field

Metgasco Limited (ASX: MEL) has reported a remarkable 105% increase in gas revenue for the December 2024 quarter, reaching approximately $753,200. This surge is primarily attributed to enhanced production activities at the Odin gas field, where optimisation efforts at the Odin-1 well nearly doubled average gas output from 1.66 MMscfd to 3.1 MMscfd. Additionally, Odin-2 commenced production mid-October, contributing an average of 1.04 MMscfd during the quarter.

These operational improvements have significantly lifted Metgasco’s production profile, with total production for the quarter doubling to 0.06 PJe from the prior quarter’s 0.03 PJe. The Odin field’s increased availability, online for nearly 80 days compared to 46 days previously, also played a key role in this uplift.

Addressing Scale Challenges to Ensure Accurate Measurement

However, the quarter was not without challenges. Scale formation inside the Odin gas export meter was discovered to have caused under-measurement of gas volumes and over-measurement of water. This issue, identified through production logs and field investigations, prompted a cleaning program and the installation of a chemical injection system by quarter-end to prevent further scale accumulation.

Metgasco is actively considering a low-cost, long-term optimisation program to manage scale downhole, which is expected to further stabilise and potentially increase production rates in the coming months.

Reserve Upgrade Signals Growing Asset Value

Complementing the production gains, an independent reserve assessment by Chris Dykes Reserves International Limited as of June 30, 2024, revealed a 45% increase in Metgasco’s net proved and probable reserves. The upgrade, driven largely by the conversion of contingent resources at Odin, now stands at 6.3 million barrels of oil equivalent (MMboe), including 11.2 PJ of sales gas and ethane.

This reserve enhancement underscores the growing value of Metgasco’s Cooper Basin assets and provides a solid foundation for future development and revenue growth.

Financial Position and Corporate Developments

On the corporate front, Metgasco increased its debt facility with Glennon Small Companies by $300,000 to a total of $3.18 million during the quarter. This funding supports ongoing field operations and working capital needs. The company ended the quarter with a cash balance of approximately $418,000 and continues to explore options to strengthen its financial position.

Shareholders approved all resolutions at the November AGM, and a strategic business review commenced in late October with PAC Partners, signaling management’s intent to refine operational and financial strategies moving forward.

Outlook: Navigating Challenges and Capitalising on Growth

Metgasco’s managing director, Ken Aitken, highlighted the quarter’s achievements while acknowledging the challenges posed by scale accumulation. The company is focused on optimising production from both Odin wells and resolving scale-related issues to unlock further value. With contracts in place for gas supply through to 2026 and a strengthened reserve base, Metgasco is positioned to build on this momentum in 2025.