Cue Energy Delivers 10% Revenue Growth Amid Strategic Development Push
Cue Energy Resources reported a 10% revenue increase to $54.8 million in FY2025, declaring a final dividend and advancing key development projects that underpin future growth.
- 10% revenue growth to $54.8 million with EBITDAX of $30.3 million
- Final dividend of 0.5 cents per share declared, totaling 1.5 cents for FY2025
- Stable production at 602 mboe with growth in Mahato and Mereenie offsetting Sampang declines
- Capital expenditure focused on Mahato development impacting short-term profit and cash flow
- Progress towards Paus Biru final investment decision and ongoing Mahato development
Strong Financial Performance Despite Market Volatility
Cue Energy Resources Limited (ASX – CUE) has reported a solid set of full-year results for FY2025, posting a 10% increase in revenue to $54.8 million. This growth was achieved despite a challenging global energy market marked by price volatility and operational uncertainties. EBITDAX, a key measure of operational profitability, stood at $30.3 million, reflecting the company’s resilient portfolio and effective cost management.
Net profit after tax, however, declined by 56% to $6.3 million, primarily due to increased production costs and amortisation expenses. These cost pressures were largely driven by accelerated development activities, particularly at the Mahato PSC in Indonesia, where capital expenditure rose to support future production growth.
Dividend Policy Balances Reward and Reinvestment
The company declared a final dividend of 0.5 cents per share, bringing the total dividend for FY2025 to 1.5 cents per share, which equates to a generous 14% yield based on the share price at the start of the financial year. This marks the fourth consecutive dividend under Cue’s policy, underscoring a commitment to returning value to shareholders while maintaining flexibility for strategic investments.
CEO Matthew Boyall highlighted that the reduced final dividend reflects the company’s focus on capital management and upcoming investment decisions, particularly in development projects that promise to enhance long-term returns.
Operational Highlights and Production Stability
Production remained stable at 602 thousand barrels of oil equivalent (mboe), with growth in the Mahato and Mereenie fields offsetting natural declines at the Sampang PSC. Notably, 13 production wells were completed during the year, including 11 at Mahato and two gas wells at Mereenie. Post-year-end drilling at Mahato delivered an additional 2,000 barrels of oil per day, signaling strong operational momentum.
Revenue contributions were well diversified geographically, with Indonesia accounting for 54%, New Zealand 23%, and Australia 23%. Oil and condensate sales, priced in line with Brent benchmarks, made up 68% of total revenue, while gas sales under fixed-price contracts provided steady income streams.
Looking Ahead – Growth and Development Initiatives
Looking forward to FY2026, Cue plans to intensify development efforts, particularly focusing on the Telisa reservoir within the Mahato PSC. New drilling and recompletions are expected to drive production growth, complemented by an exploration well planned for the year. The company also awaits a government decision on a 10-year permit extension for the Maari field in New Zealand, which would secure production continuity.
Infrastructure upgrades at the Sampang PSC, including the installation of a compressor at the Grati gas plant, aim to enhance gas recovery. Meanwhile, progress towards the final investment decision for the Paus Biru gas development continues, with first gas production targeted for 2027. The potential increase in Cue’s participating interest by 10% following a joint venture partner’s exit could further strengthen the company’s stake in this promising project.
Overall, Cue Energy’s FY2025 results reflect a company balancing operational discipline with strategic investment, positioning itself for sustainable growth in a complex energy landscape.
Bottom Line?
Cue Energy’s disciplined growth and development focus set the stage for a pivotal FY2026 amid evolving market dynamics.
Questions in the middle?
- How will increased capital expenditure at Mahato impact cash flow and profitability in the medium term?
- What are the implications of the potential 10% increase in Cue’s interest in the Paus Biru project?
- When will the New Zealand government decide on the Maari permit extension, and how will it affect production plans?
