High Peak Royalties Advances Strategic Shift with Northstar Deal and Debt-Free Status

• March quarter royalty receipts total A$344,751 with net cash inflows of A$90,315
• Completed first tranche of Torrens Energy sale to Northstar, receiving A$2 million in shares
• Company now debt free after repaying Macquarie Bank facility
• Peat Gas Field production impacted by 21-day offline period in March
• Regulatory approval secured for geothermal exploration environmental management in South Australia

Steady Royalty Income Amid Operational Challenges

High Peak Royalties Limited (ASX: HPR) has released its March 2025 quarterly report, highlighting a stable stream of royalty receipts totaling A$344,751. After accounting for operating outflows, the company recorded net cash receipts of A$90,315 and closed the quarter with a healthy cash balance of A$288,093. Despite a temporary production setback at the Peat Gas Field in Queensland, where the field was offline for 21 days, High Peak notes that average production rates outside this period aligned with expectations.

Strategic Divestment and Partnership with Northstar Energy

A key development during the quarter was the material transaction involving the sale of High Peak's wholly owned subsidiary Torrens Energy to Northstar Energy Limited. This deal transfers responsibility for geothermal exploration licenses in South Australia and includes a 1.0% gross royalty over geothermal energy production. High Peak received 12.5 million Northstar shares valued at approximately A$2 million, with the first tranche completed and the second tranche pending ministerial consent. This partnership signals a strategic pivot towards renewable energy assets and provides High Peak with potential upside through Northstar’s future capital raising initiatives.

Debt-Free and Financially Poised

In a significant financial milestone, High Peak has fully discharged its obligations under the Macquarie Bank debt facility, rendering the company debt free. This deleveraging enhances High Peak’s financial flexibility and positions it well to fund ongoing operations and pursue new royalty opportunities without the burden of interest costs. The company confirmed that its current cash reserves are sufficient to meet near-term working capital needs.

Monitoring and Regulatory Progress

High Peak continues to actively monitor its royalty interests across multiple basins, including the Amadeus Basin in the Northern Territory and the Gippsland Basin in Victoria. While no new updates were provided by operators regarding farmout discussions or production at some sites, the company remains engaged with permit holders. Additionally, regulatory progress was made with the South Australian Department for Energy and Mining approving the Environmental Impact Report and Statement of Environmental Objectives for geothermal exploration activities, ensuring compliance and environmental stewardship.

Looking Ahead

With a diversified royalty portfolio spanning Australia and the United States, and a strategic partnership that aligns with the energy transition, High Peak Royalties is navigating a complex energy landscape with cautious optimism. The timing of ministerial consent for the Torrens Energy sale’s second tranche remains a key variable, as does the recovery trajectory of gas production at the Peat Gas Field. Investors will be watching closely to see how these factors influence High Peak’s cash flow and growth prospects in the coming quarters.

Bottom Line?

High Peak’s strategic asset sale and debt-free status set the stage for renewed growth, but regulatory and production uncertainties remain key watchpoints.

Questions in the middle?

• When will ministerial consent be granted to complete the second tranche of the Torrens Energy sale?
• How will the Peat Gas Field’s production recover following the recent offline period?
• What impact will the Northstar partnership have on High Peak’s future royalty income and capital structure?