Can Amplitude Energy Sustain Gains as ECSP Faces Execution and Regulatory Risks?

Financial Performance and Operational Highlights

Amplitude Energy Limited has delivered a notable turnaround in its financial results for the year ended 30 June 2025. The company posted a 22% increase in revenue to A$268.1 million, driven primarily by a 17.1% rise in production volumes and improved gas prices. Despite recording a statutory net loss of A$41.3 million, this represents a significant improvement from the prior year’s loss of A$114.1 million, reflecting enhanced operational efficiency and cost management.

Central to this performance was the Orbost Gas Processing Plant (OGPP), which set multiple production records, averaging 62 terajoules per day; well above previous years. Operational improvements, including absorber maintenance and sulphur processing enhancements, contributed to increased plant reliability and throughput, positioning OGPP as a key value driver for the company.

Progress on East Coast Supply Project and Strategic Partnerships

A major strategic milestone was the advancement of the East Coast Supply Project (ECSP), a three-well drilling program targeting new gas discoveries in the Otway Basin. Amplitude Energy entered into a binding joint venture agreement with O.G. Energy, aligning interests on a 50/50 basis and securing reimbursement for historical project costs. The partnership has approved the drilling campaign, with the Transocean Equinox rig scheduled to commence operations in late 2025.

This collaboration not only strengthens Amplitude Energy’s growth pipeline but also enhances its ability to backfill existing infrastructure, such as the Athena Gas Plant, with up to 90 terajoules per day of new supply by 2028, subject to regulatory approvals. The company’s focus on leveraging existing assets and infrastructure underscores its commitment to cost-effective and environmentally conscious development.

Capital Management and Funding Flexibility

To support its growth ambitions, Amplitude Energy successfully increased its senior secured reserve-based lending facility by A$80 million to A$480 million, with the maturity extended to September 2029. This enhanced liquidity position provides the company with financial flexibility to fund the ECSP and other development activities while maintaining compliance with debt covenants.

Cash reserves stood at A$62.2 million at year-end, complemented by undrawn debt availability of approximately A$170 million. The company’s prudent capital management approach balances organic cash generation with access to capital markets, positioning it well to navigate market volatility and fund future projects.

Sustainability and Safety Commitment

Amplitude Energy maintained strong health, safety, and environmental performance, recording zero fatalities and a total recordable injury frequency rate well below industry benchmarks. The company also continued its commitment to sustainability by fully offsetting its Scope 1, Scope 2, and relevant Scope 3 emissions through certified carbon credits, reinforcing its position as a carbon-neutral organisation.

Notably, the company commenced commercial sales of elemental sulphur, a by-product of gas processing, for agricultural use, demonstrating innovative approaches to resource utilisation and environmental stewardship.

Executive Remuneration and Governance

Executive remuneration outcomes reflected the company’s improved performance, with short-term incentives linked to operational and financial targets. The remuneration framework balances fixed pay with performance-based incentives, including deferred equity components to align management interests with shareholders. The Board continues to oversee governance practices, ensuring transparency and accountability.

Risks and Outlook

Key risks identified include sustaining production performance, particularly at OGPP and AGP, execution risks associated with the ECSP, joint venture alignment with O.G. Energy, and evolving regulatory and market conditions. Restoration obligations and ongoing legal proceedings, such as the claim against PT Pertamina Hulu Energi for decommissioning costs, also present uncertainties.

Looking ahead, Amplitude Energy aims to finalise the ECSP investment decision in early 2026, increase production capacity, and continue margin growth through cost efficiencies and pricing strategies. The company’s strategic focus on domestic gas supply aligns with Australia’s energy transition and government policies supporting reliable and affordable energy.