How Did Echelon Resources Achieve a 1931% Profit Surge in FY2025?

Strong Financial Performance Amid Strategic Growth

Echelon Resources Limited has delivered a standout financial performance for the year ended 30 June 2025, reporting a 34% increase in revenue to AUD 115.3 million. This growth marks the first time in five years that the company’s revenue has surpassed the AUD 100 million threshold, underscoring the impact of its strategic moves and favourable market conditions.

The company’s net profit after tax (NPAT) attributable to shareholders surged dramatically by 1931% to AUD 3.2 million, a significant turnaround from the modest AUD 0.2 million recorded in the previous year. When excluding impairment and exploration expenditures, NPAT rose a solid 42% to AUD 16.5 million, reflecting the underlying operational strength of the business.

Key Drivers – Asset Acquisition and Production Success

A pivotal factor behind this performance was the acquisition of an additional 25% interest in the Mereenie gas field in Australia’s Northern Territory, completed in June 2024. This acquisition, combined with the successful drilling of two development wells (WM29 and WM30) at Mereenie, contributed to a notable uplift in production volumes.

High commodity prices further amplified revenue gains, benefiting the company’s portfolio which includes interests in the Kupe oil and gas field in New Zealand and other assets across the Amadeus Basin. Despite some impairments totalling AUD 5.3 million; primarily related to the Kupe asset and exploration assets in the Perth Basin; the company’s operational cash flow increased by 62% to AUD 54.1 million, supporting ongoing investment and shareholder returns.

Balance Sheet and Dividend Highlights

Echelon’s balance sheet remains solid with net assets of AUD 156.5 million and a cash position of AUD 36.8 million, slightly down from the prior year but supported by strong operating cash flows. The company maintains a $63 million loan facility, with borrowings of AUD 47.5 million, and remains compliant with all loan covenants.

Shareholders benefited from an interim unimputed dividend of 1.5 cents per share paid in March 2025 and a final unimputed dividend of 0.75 cents per share declared in August 2025, amounting to a total dividend payout of AUD 5.0 million for the year. This continues a pattern of steady returns, with AUD 15.1 million returned over the past eighteen months.

Currency Shift and Future Outlook

Notably, Echelon changed its presentation currency from New Zealand dollars to Australian dollars effective 1 July 2024, aligning its financial reporting with its operational focus and strategic direction in the Australian market. This change, along with restatements for prior periods, provides clearer insight into the company’s performance for investors.

Looking ahead, Echelon continues to invest in exploration and development, including commitments to seismic surveys and drilling programs, while managing risks related to commodity price fluctuations and reserve estimates. The company’s auditor highlighted the recoverability of oil and gas assets as a key audit matter, reflecting the importance of these assumptions to future valuations.