QPM Faces Weather Disruptions as Townsville Power Station Overhaul Begins
QPM Energy reports a substantial 61% upgrade in Moranbah Gas Project reserves to 435PJ, successfully integrates Moranbah Power Station operations, and begins overhaul of Townsville Power Station, navigating weather disruptions and contract renewals.
- 61% increase in Moranbah Gas Project 2P reserves to 435PJ
- Successful integration of 12.8MW Moranbah Power Station reduces costs and boosts electricity sales
- Townsville Power Station overhaul commenced, targeting early July completion
- Production impacted by storm damage and restricted field access
- New contracts for North Queensland Gas Pipeline and QPS capacity start July 2025
Reserve Upgrade Signals Stronger Asset Base
QPM Energy has announced a significant milestone with a 61% upgrade in its 2P reserves at the Moranbah Gas Project (MGP), now certified at 435PJ by independent experts Netherland, Sewell & Associates Inc. This upgrade reflects the integration of extensive geological data and successful well workovers, reinforcing the project’s long-term production potential and underpinning future growth plans.
The reserve enhancement comes at a pivotal time as QPM navigates operational challenges and strategic expansions, positioning the company to capitalize on its strengthened resource base.
Operational Integration and Cost Efficiencies
The quarter saw the successful integration of the 12.8MW Moranbah Power Station (MPS) into QPM’s operations. This move has delivered tangible benefits, including operating cost savings and increased electricity generation and sales. By leveraging behind-the-meter generation and opportunistic electricity purchases from the National Electricity Market (NEM) at low or negative prices, QPM enhanced its power dispatch strategy, resulting in a $1.7 million net benefit compared to the previous quarter.
However, production was not without its hurdles. Severe storms and heavy rainfall caused damage to electrical infrastructure and restricted field access, temporarily suppressing managed production. Despite these setbacks, rectification efforts progressed well, with production recovering to over 23TJ/day by quarter-end.
Townsville Power Station Overhaul and Contract Transitions
QPM commenced an extensive overhaul of the Townsville Power Station (TPS) gas turbine on 27 March, with re-commissioning scheduled for late June and full operational availability expected by early July. This maintenance phase necessitated a reduction in gas supply to meet contractual obligations with Dyno Nobel and CRL, maintaining production levels aligned with power station dispatch requirements.
Meanwhile, legacy contracts for the North Queensland Gas Pipeline (NQGP) and Queensland Power Station (QPS) capacity expired, with new contracts set to commence on 1 July 2025. These contract renewals mark a critical juncture for QPM’s operational and financial planning as the company prepares for the next phase of its gas supply and power generation activities.
Advancing the Moranbah Power Project
QPM continues to advance its strategy to expand power generation capacity through the Moranbah Power Project (MPP). The company made solid progress on front-end engineering design (FEED), equipment sourcing, grid connection applications, and development approvals during the quarter. Funding and offtake discussions are ongoing, with feasibility and commercial plans expected to be finalized in the June quarter, signaling a clear pathway toward project execution.
Financial Position and Outlook
At quarter-end, QPM held $23.8 million in cash and equivalents, supported by $21 million drawn from the Dyno Nobel working capital facility, leaving $9 million available under the $30 million limit. This liquidity position provides sufficient funding coverage through the TPS overhaul and contract transition period. Despite a 33% decline in quarterly revenue to $20.6 million, attributable to lower electricity prices driven by mild weather and the TPS steam generator outage, the company maintains a stable financial footing to support ongoing operations and development initiatives.
QPM’s capital expenditure focused on optimizing gas gathering system performance and progressing well development programs, including plans for a second stage of new wells targeted for October 2025, further underpinning production growth prospects.
Bottom Line?
QPM Energy’s robust reserve upgrade and strategic operational moves set the stage for a transformative year, though weather and infrastructure risks remain key watchpoints.
Questions in the middle?
- How will the new contracts commencing July 2025 impact QPM’s revenue and margins?
- What are the prospects and timelines for returning the Townsville Power Station’s steam generator to full service?
- How will ongoing weather-related disruptions influence production stability and capital expenditure plans?