Omega Oil and Gas Unveils Strong Canyon-1H Flows, Secures $7M Funding Boost

Transformational Quarter for Omega Oil and Gas

Omega Oil and Gas Limited (ASX: OMA) has marked a pivotal quarter with the successful flow testing of its Canyon-1H horizontal well in Queensland’s Bowen Basin. The well demonstrated strong commercial oil and gas flows, exceeding pre-drill expectations and confirming the presence of a significant petroleum system within the Taroom Trough. This breakthrough validates Omega’s technical strategy of horizontal drilling combined with fracture stimulation, positioning the company to accelerate its appraisal and development plans.

Robust Production Metrics Highlight Reservoir Potential

The Canyon-1H well achieved peak flow rates of 452 barrels per day of 49.5 API light crude oil and 0.60 million standard cubic feet of associated gas per day from a 650-metre lateral section. When extrapolated to a 2,000-metre lateral, sustained 24-hour rates translate to nearly 1,000 barrels of oil per day and 1.45 million standard cubic feet of gas, underscoring the reservoir’s excellent quality and commercial viability. Laboratory analysis confirmed the oil’s light gravity, comparable to nearby established fields such as Moonie and Bennett.

Strategic Funding and Leadership Strengthen Growth Outlook

Omega has bolstered its financial position with a $7 million institutional placement at $0.315 per share, completed without discount and strongly supported by major shareholders including the Flannery family and Tri-Star. This capital injection, combined with existing cash reserves and an anticipated R&D tax refund, fully funds the company’s next appraisal phase. Complementing this financial momentum, Omega appointed industry veteran Martin Houston as Chair. Houston’s four decades of global oil and gas experience, including leadership roles at BG Group and Tellurian, bring invaluable expertise as Omega advances its strategic objectives.

Next Steps: Data Interpretation and Expanded Appraisal

Following the Canyon-1H success, Omega is actively interpreting cased-hole wireline logs from the Canyon-2 vertical well, acquired in April, with Diagnostic Fracture Injection Tests (DFIT) scheduled for May. These efforts aim to refine reservoir models and guide a detailed appraisal program targeting both oil and gas plays. Preparations are also underway for seismic acquisition and further drilling in the second half of 2025, alongside advancing commercial modelling and strategic partnership discussions with potential Tier-1 players.

Bennett Oilfield Remains on Hold

Meanwhile, operations at the Bennett Oilfield remain suspended as Omega completes optimisation studies and seeks farm-in partners. This measured approach reflects the company’s focus on maximising value from its core Canyon Gas Field project while maintaining flexibility across its portfolio.

Financial Position and Outlook

At quarter-end, Omega reported $9.4 million in cash and cash equivalents, excluding $4.2 million held in trust pending share allotment. Exploration expenditures on Canyon-1H totalled $7.6 million during the quarter. The company’s strong cash position and funding strategy provide a runway exceeding one year at current expenditure levels, supporting its aggressive appraisal and development timeline.

CEO Trevor Brown emphasised the transformational nature of the quarter, highlighting the dual development pathways now open for the Canyon Project and the company’s strengthened leadership and financial foundation. As Omega moves into the next phase, the market will be watching closely for results from upcoming tests and partnership developments that could unlock substantial value.