Lion Energy Reports 70,883 Barrels Produced, Advances Hydrogen EPC Strategy
Lion Energy has made steady progress on its Port of Brisbane Green Hydrogen Project while moving closer to securing funding for a key drilling operation in Indonesia’s East Seram PSC.
- Initial EPC cost estimates received for Port of Brisbane hydrogen project
- Drilling plans for Bula Karang prospect in East Seram PSC advanced for Q2 2026
- Funding discussions ongoing for East Seram PSC drilling farm-in
- Seram (Non-Bula) PSC crude oil production steady at 70,883 barrels in Q2 2025
- Regulatory divestment negotiations continue for Seram (Non-Bula) PSC interest
Hydrogen Project Momentum and Cost Optimization
Lion Energy Limited is steadily advancing its flagship Port of Brisbane Green Hydrogen Project, a cornerstone initiative aimed at establishing Southeast Queensland’s first commercial-scale green hydrogen hub. During the second quarter of 2025, the company received initial engineering, procurement, and construction (EPC) cost estimates and is actively refining its strategy to optimise development costs. This cost management is critical as Lion works to finalise offtake agreements, which remain contingent on selecting an EPC contractor and confirming development cost assumptions.
The company’s approach to EPC contracting involves a risk-sharing strategy designed to balance cost efficiency with performance requirements, particularly to meet the demands of hydrogen vehicle refuelling and bulk offtake customers. This careful calibration reflects Lion’s commitment to delivering a viable green hydrogen supply chain while managing financial and operational risks.
Progress on East Seram Drilling Plans
On the oil and gas front, Lion is advancing plans to drill the Bula Karang prospect within the East Seram Production Sharing Contract (PSC) area in Indonesia. The Bula Karang reefal carbonate prospect, identified through seismic surveys, holds a significant prospective resource estimated at 13 million barrels (unrisked). The company is targeting a Q2 2026 drilling timeline, with technical and regulatory preparations well underway involving partners, contractors, and government agencies.
Crucially, Lion is in advanced discussions to secure funding for this drilling through a farm-in agreement, expected to be formalised in the third quarter of 2025. Success at Bula Karang could open up substantial follow-up opportunities, given the prospect’s potential and proximity to existing infrastructure on Seram Island, which would facilitate rapid commercialisation.
Steady Production and Portfolio Management
Meanwhile, production from the Seram (Non-Bula) PSC remains steady, with gross crude oil output of 70,883 barrels during the quarter, translating to Lion’s share of 1,772 barrels. Daily production averaged 779 barrels of oil per day (bopd) at the field level, with Lion’s net interest at 19 bopd. The company continues to manage regulatory requirements, including ongoing negotiations for a mandated divestment of a 0.25% interest in this PSC, which would reduce Lion’s stake to 2.25%.
These operational updates underscore Lion’s dual focus on maintaining cash flow from existing oil assets while pursuing growth through both conventional hydrocarbon exploration and emerging green hydrogen initiatives.
Strategic Outlook
Chairman Tom Soulsby highlighted the balanced progress across Lion’s portfolio, noting that while hydrogen project momentum was moderated by strategic refinements, the oil and gas operations delivered clear advances. The company’s emphasis on cost optimisation and risk management in the hydrogen venture, alongside advancing a high-potential drilling prospect in East Seram, positions Lion at an intriguing intersection of traditional energy and the energy transition.
Investors and industry watchers will be keenly awaiting the formal announcement of funding arrangements and drilling plans for the East Seram PSC, as well as further clarity on the hydrogen project’s commercial milestones.
Bottom Line?
Lion Energy’s next moves on funding and drilling will be pivotal in defining its growth trajectory amid evolving energy markets.
Questions in the middle?
- Will Lion secure binding funding agreements for the East Seram drilling in Q3 2025?
- How will the final EPC contractor selection impact the Port of Brisbane hydrogen project timeline and costs?
- What are the implications of the ongoing regulatory divestment for Lion’s Seram (Non-Bula) PSC stake?