Echelon Resources finalised its EP145 acquisition and reported a slight dip in production volumes, while Amadeus Basin receipts surged 24% thanks to new wells. The company maintains a strong cash position and is actively reshaping its portfolio for future growth.
- EP145 acquisition and operatorship completed
- Amadeus Basin production receipts up 24% with new wells WM29 and WM30
- Production volumes declined 2.5% to 425,962 boe for the quarter
- Sale of Brewer Estate oil terminal for A$2 million
- Withdrawal from non-core Western Australia permits EP437 and L7
Strategic Acquisition and Seismic Survey Plans
Echelon Resources marked a significant milestone in the June quarter by completing the acquisition and operatorship transfer of EP145, a highly prospective permit in the Amadeus Basin adjacent to the producing Mereenie field. This move positions Echelon to leverage new exploration opportunities, with planning well underway for a 3D seismic survey to better understand the West Walker gas discovery within EP145. Engagement with Traditional Owners through the Central Land Council is progressing, reflecting the company’s commitment to responsible development.
Production and Financial Performance
Despite a modest 2.5% decline in total production volumes to 425,962 barrels of oil equivalent (boe), Echelon’s daily production remained steady at 4,681 boe per day. Notably, production receipts from the Amadeus Basin rose by 24%, buoyed by the strong performance of the newly drilled WM29 and WM30 wells at Mereenie, which have exceeded expectations and are producing above pre-drill forecasts. The company’s disciplined capital management is evident in its robust cash balance of A$36.8 million and a recent loan repayment of A$7 million, underscoring financial stability amid ongoing development activities.
Portfolio Optimization and Operational Focus
Echelon is actively refining its portfolio, withdrawing from non-core Western Australian permits EP437 and L7 following a non-commercial outcome at the Becos-1 well. This strategic exit allows the company to concentrate resources on higher-value assets. Meanwhile, development drilling continues apace in the Mahato PSC in Indonesia, with three wells drilled and further work planned to expand production. In the Sampang PSC, negotiations for contract extensions and commercial terms remain ongoing, with the potential for Cue Energy Resources, in which Echelon holds a near 50% stake, to increase its interest post-2027.
Environmental and Regulatory Progress
Environmental approvals have been secured for two new infill wells at Palm Valley, reflecting positive regulatory engagement. However, production at Sampang was temporarily impacted by a scheduled maintenance shutdown and technical issues, with remedial work planned to restore output. The Maari field in New Zealand reached a production milestone of 50 million barrels since 2009, though recent well faults have temporarily reduced output. Repairs are underway, with expectations to exceed 5,000 barrels per day once completed.
Looking Ahead
With a clear focus on disciplined capital allocation and portfolio evolution, Echelon is well-positioned for future growth. The upcoming seismic survey results from EP145, progress on the Sampang PSC contract extension, and ongoing well repair efforts at Maari will be key developments to watch. The company’s ability to balance operational challenges with strategic opportunities will shape its trajectory in the coming quarters.
Bottom Line?
Echelon’s strategic moves and operational resilience set the stage for growth, but upcoming seismic data and contract negotiations will be critical to watch.
Questions in the middle?
- How will the results of the EP145 seismic survey influence Echelon’s exploration strategy?
- What are the implications of Cue potentially increasing its interest in the Sampang PSC after 2027?
- How quickly can Maari field production recover following recent well repairs?