Blue Energy Secures Over 1,000 PJ Gas Permits Despite Pilot Well Delays

Blue Energy Expands Queensland Gas Portfolio

Blue Energy Limited (ASX – BLU) has made notable strides in the June 2025 quarter, securing two Potential Commercial Areas (PCAs 336 and 337) within its ATP 814 permit near Moranbah, Queensland. These areas, known as the Lancewood and Central Blocks, collectively hold over 1,000 petajoules (PJ) of contingent gas resources, according to independent assessments by Netherland Sewell and Associates Inc. This award, alongside the renewal of ATP 814, significantly enhances Blue Energy’s resource base in the Bowen Basin, positioning the company for future development opportunities.

Meanwhile, Blue Energy continues to work closely with Queensland authorities to finalize Petroleum Lease 1034 over the Sapphire Block. This follows a landmark decision by the Queensland Land Court to grant an Environmental Authority after a protracted two-year legal challenge, clearing a critical regulatory hurdle for the Sapphire Pilot project.

Operational Challenges and Strategic Partnerships

Despite these advances, Blue Energy faced operational setbacks during the quarter. The Sapphire 5 and 6 lateral pilot wells were temporarily shut in due to mechanical failures affecting both downhole and surface pumping equipment. These issues have paused gas production testing, though management expects to resolve them and resume operations in the current quarter. The company’s ability to swiftly address these technical challenges will be pivotal in maintaining project momentum.

On the commercial front, Blue Energy has strengthened its strategic alignment with Queensland Pacific Minerals Energy (QPME), the operator of the nearby Moranbah Gas Project. The two companies have signed non-binding Memorandums of Understanding (MoUs) for Blue Energy to supply gas to QPME’s proposed nickel refinery in Townsville and to deliver pilot gas via a proposed pipeline connecting the Sapphire Pilot to the Moranbah Gas field infrastructure. This collaboration could streamline Blue Energy’s market access and infrastructure utilization, enhancing its competitive position.

Financial Position and Future Outlook

Financially, Blue Energy reported a cash balance of A$0.913 million at quarter-end, with no debt on its books. Exploration and evaluation expenditure for the quarter totaled A$0.427 million, reflecting ongoing investment in project development and resource assessment. However, the company acknowledges the need for additional capital to sustain operations and is actively exploring fundraising options. Directors and executives have agreed to defer remuneration payments pending successful capital raising, underscoring the company’s commitment to prudent financial management.

Blue Energy’s portfolio also extends to the Surat Basin (ATP 854) and the Northern Territory’s Greater McArthur Basin, where it holds various exploration permits with work program suspensions granted by the Northern Territory Government. These assets, while at earlier stages, contribute to the company’s long-term growth potential.

Looking ahead, the market will be watching Blue Energy’s ability to recommence pilot well testing, secure Petroleum Lease 1034, and successfully raise capital. These factors will be critical in translating its substantial contingent resources into commercial reserves and production.