Can NuEnergy Turn Early Gas Sales Into a Funding Lifeline?

Quarterly Financial Overview

NuEnergy Gas Limited’s latest quarterly cash flow report reveals the company remains firmly in the exploration phase, with net cash used in operating activities amounting to AUD 115,000 for the quarter ending 30 June 2025. Capitalised exploration and evaluation expenses were significant at AUD 1.362 million, reflecting ongoing investment in its coal bed methane projects.

Despite these outflows, NuEnergy closed the quarter with AUD 2.435 million in cash and cash equivalents, supported by fully drawn loan facilities totaling AUD 3.144 million from related parties. These loans, provided by subsidiaries of the ultimate parent company GFB, carry a 10% annual interest rate and are unsecured but repayable on demand, underscoring the company’s reliance on internal group financing to fund its activities.

Progress on Early Gas Sales Initiative

NuEnergy is actively progressing its Early Gas Sales Initiative, aiming to monetise its Indonesian coal bed methane assets ahead of full-scale production. The company has completed drilling and commenced dewatering on two of four planned wells, with the third well currently being drilled and preparations underway for the fourth. This initiative targets initial gas sales of one million standard cubic feet per day, a milestone that could provide much-needed revenue to offset exploration costs.

Further bolstering this effort, NuEnergy has signed a Heads of Agreement with PT Perusahaan Gas Negara Tbk (PGN), a major player in Indonesia’s natural gas distribution sector. This agreement sets the stage for future coal bed methane sales, potentially marking a pivotal step towards commercialisation.

Funding and Operational Outlook

While operating cash flows remain negative, NuEnergy acknowledges this is typical for an exploration-stage company. The board is actively monitoring cash flow and has initiated steps to raise additional capital to sustain ongoing exploration and development activities. The company retains flexibility to scale drilling programs based on financial capacity, aiming to balance progress with prudent cash management.

NuEnergy’s management remains confident in its ability to continue operations and meet business objectives, leveraging the Early Gas Sales Initiative to generate initial revenue streams. However, the timing and success of capital raising efforts remain critical to maintaining momentum and funding future exploration phases.