MEC Resources Ltd has reported a net profit of $207,490 for the 2025 financial year, reversing prior losses, while advancing a significant legal challenge through its investee Advent Energy Ltd and raising $2.6 million via an entitlement offer.
- Net profit of $207,490 for FY2025, reversing prior year loss
- Raised $2.6 million from non-renounceable entitlement offer
- Holds 37.95% stake and $4.92 million loan in Advent Energy Ltd
- Advent Energy’s PEP-11 offshore Sydney Basin permit under Federal Court judicial review
- Exposure to Clean Hydrogen Technologies advancing low-emission hydrogen production
Financial Turnaround and Capital Strengthening
MEC Resources Ltd has reported a modest net profit of $207,490 for the year ended 30 June 2025, marking a turnaround from a loss of nearly half a million dollars the previous year. This improvement comes alongside a successful capital raise, with the company securing $2.6 million through a non-renounceable entitlement offer, supplemented by $317,000 raised from option exercises. These efforts have bolstered MEC’s net assets to $11.16 million, providing a stronger financial footing as it navigates ongoing operational and legal challenges.
Strategic Investments and Legal Challenges in Advent Energy
A significant portion of MEC’s portfolio is tied to its 37.95% interest in Advent Energy Ltd, an unlisted oil and gas exploration company focused on Australian onshore and offshore assets. MEC also holds a $4.92 million loan asset to Advent, which is subject to repayment terms linked to Advent’s drilling activities. Advent’s flagship asset, the PEP-11 petroleum exploration permit in the offshore Sydney Basin, is currently embroiled in a Federal Court judicial review following a refusal by the Commonwealth-New South Wales Offshore Petroleum Joint Authority to approve pending applications. This legal process, scheduled for hearing in September 2025, creates material uncertainty around the permit’s future and, by extension, the recoverability of MEC’s investment and loan.
PEP-11 Permit, Potential and Uncertainty
The PEP-11 permit covers a large offshore area near Sydney, with prospective resources estimated at 5.7 trillion cubic feet of natural gas. Advent has identified promising seismic and geochemical indicators suggesting hydrocarbon presence, but regulatory delays and the judicial review cast a shadow over the project’s near-term prospects. Advent’s commitment to net zero emissions by 2050 includes plans to explore carbon capture and storage opportunities offshore New South Wales, positioning the company at the intersection of traditional energy and emerging clean technologies.
Emerging Hydrogen Technology Exposure
Beyond hydrocarbons, MEC’s portfolio includes exposure to Clean Hydrogen Technologies Corporation, a company developing innovative turquoise hydrogen production technology that emits no CO2. Advent and BPH Energy Ltd, another MEC investee, hold stakes in Clean Hydrogen, which has demonstrated promising pilot-scale results and is advancing plans for production facilities in India and the USA. This positions MEC to benefit from the global energy transition, although commercial scale-up and funding remain key hurdles.
Governance and Cash Conservation Measures
MEC’s board, led by Managing Director David Breeze, has maintained a conservative approach to cash management, with directors’ fees accrued but unpaid to preserve liquidity. The company remains a registered Pooled Development Fund, offering tax advantages to shareholders and focusing on investments in early-stage Australian energy and resource companies. Auditor Moore Australia Audit has issued an unqualified opinion but highlighted material uncertainty regarding the valuation of MEC’s loan and investment in Advent due to the ongoing legal and operational risks.
Bottom Line?
MEC’s modest profit and capital raise provide a platform, but the outcome of Advent’s legal battle and hydrogen ventures will shape its future trajectory.
Questions in the middle?
- What is the likely outcome and timeline of the Federal Court judicial review on the PEP-11 permit?
- How will Advent Energy’s operational progress and funding needs impact MEC’s loan recoverability?
- Can Clean Hydrogen Technologies scale production successfully to generate meaningful returns for MEC?