Australis Reports 3% Sales Volume Rise, 2% Revenue Dip in Q4 2024
Australis Oil & Gas reported a 3% rise in sales volume for Q4 2024 despite a slight dip in revenue due to lower commodity prices, while actively pursuing partnerships to unlock the full potential of its Tuscaloosa Marine Shale assets.
- Q4 2024 sales volume increased by 3% to 62,000 barrels
- Sales revenue slightly declined by 2% to US$4.5 million due to lower oil prices
- Net debt reduced by 19% to US$2.2 million, supported by debt repayments
- Year-end 2024 reserves assessed at 65 million barrels 2P+2C with producing reserves of 1.62 million barrels
- Ongoing engagement with potential partners for asset development in the Tuscaloosa Marine Shale
Operational Performance and Financial Overview
Australis Oil & Gas Limited (ASX: ATS) closed out 2024 with a modest increase in production volumes, reporting 62,000 barrels sold in the fourth quarter, a 3% rise from the previous quarter. This uptick was achieved despite challenging weather conditions that caused temporary power outages in parts of the field. However, the company’s sales revenue edged down 2% to US$4.5 million, reflecting the impact of lower commodity prices during the period.
Operational efficiencies helped offset the revenue decline, with lower operating costs contributing to an 8% increase in field netback to US$1.8 million. Adjusted EBITDA also improved to US$0.8 million, up from US$0.6 million in Q3, bolstered by reduced general and administrative expenses and a US$0.2 million COVID employee retention credit.
Balance Sheet Strengthening and Debt Management
Australis continued to strengthen its balance sheet, reducing total debt under its Macquarie Credit Facility by US$1.4 million to US$8.4 million. The net debt position improved by 19% to US$2.2 million, supported by operational cash flow and repayments tied to hedged production volumes. The company’s cash balance stood at US$6.2 million at quarter-end, providing a solid liquidity buffer as it advances its strategic initiatives.
Reserve and Resource Update
Independent engineering firm Ryder Scott Company, L.P. completed Australis’ year-end 2024 reserves assessment, confirming 1.62 million barrels of proved developed producing (PDP) reserves with a net present value (NPV10) of US$38 million. The combined 2P plus 2C recoverable volumes stand at an estimated 65 million barrels, underscoring the significant upside potential of Australis’ core acreage in the Tuscaloosa Marine Shale (TMS).
Notably, the company’s net acreage in the TMS core decreased by 22% to approximately 48,000 acres, primarily due to lease expirations. However, 83% of this acreage remains held by production (HBP), preserving the value of its core asset base. Australis has maintained a disciplined approach to lease management, focusing on cash preservation while remaining confident in renewing acreage once a funding partner is secured.
Strategic Partner Engagements and Outlook
Throughout the quarter, Australis intensified its engagement with multiple potential partners, both public and private, who have conducted technical and commercial due diligence on the TMS assets. While some counterparties have paused progress due to strategic fit or capital allocation priorities, Australis remains optimistic about securing a partnership that can unlock the development of its substantial contingent resources.
The company’s management emphasizes a patient and methodical approach, balancing the need for capital with maintaining operational momentum. The TMS remains an underdeveloped but promising unconventional oil play, and Australis’ position as the largest acreage holder and producer in the core area positions it well to benefit from future industry evolution and technological advancements.
Looking Ahead
Australis’ ability to convert its contingent resources into reserves hinges on securing a funding partner and executing a qualifying development plan. With a solid operational foundation, improving financial metrics, and active partnership discussions, the company is poised to advance its strategic growth objectives in 2025 and beyond.
Bottom Line?
Australis’ steady operational gains and disciplined financial management set the stage for a pivotal year as it seeks partners to unlock its vast Tuscaloosa Marine Shale potential.
Questions in the middle?
- Which potential partners are closest to finalising agreements with Australis?
- How will fluctuating oil prices impact Australis’ hedging strategy and future revenues?
- What timeline does Australis envision for converting contingent resources into developed reserves?