Galilee’s US Expansion Hinges on Shareholder Approval and Drilling Success

Strategic US Expansion

Galilee Energy Limited (ASX – GLL) has taken a decisive step to broaden its footprint beyond Australia by securing an option to acquire the Zydeco Gas and Condensate Project in Louisiana, USA. This move represents a transformative acquisition for the company, positioning it to fast-track production in a well-established and supportive oil and gas jurisdiction.

The Zydeco Project, located in the prolific Gulf Coast Basin, is a drill-ready opportunity with a history dating back to the 1950s. Despite initial discovery, the field has never been produced, offering Galilee a relatively low-risk entry point into the US market. The project covers 325.3 acres in Acadia Parish and includes multiple stacked reservoirs with proven productivity in nearby fields.

Capital Raising to Accelerate Development

To support this acquisition and subsequent development, Galilee has completed a A$6.5 million placement with institutional and sophisticated investors at a 25% discount to recent trading prices. The capital raise will primarily fund exploration and appraisal activities on the Zydeco Project, with a smaller portion allocated to maintaining existing Australian assets and working capital.

The placement includes a free option component, incentivizing investors with potential upside over the next three years. The company plans to issue the placement shares in two tranches, with the second tranche and associated options subject to shareholder approval expected early next year.

Project Potential and Development Outlook

Technical assessments estimate the Zydeco Project holds a mean prospective resource of approximately 8.4 billion cubic feet of gas and 430,000 barrels of condensate, net of royalties. The project targets two primary reservoirs within the Upper and Lower Tweedle formations, both proven productive in offset wells.

Galilee plans to drill the Zydeco-1 well early in 2026, aiming to bring production online within six months, subject to regulatory approvals and equipment availability. The development plan leverages existing infrastructure, including gas dehydration and pipeline tie-ins, which should help contain capital expenditure and expedite cash flow generation.

Supportive Regulatory Environment

Louisiana’s government has demonstrated strong support for the oil and gas sector, exemplified by recent major investments such as Woodside Energy’s US$17.5 billion LNG development. This regulatory backdrop provides Galilee with confidence in the project's commercial viability and potential for organic growth into a mid-tier US producer.

CEO Joseph Graham highlighted the strategic importance of the acquisition, emphasizing the project's fundamentals and the opportunity to create significant shareholder value through a robust business base and cash flow generation.

Next Steps and Shareholder Approval

The acquisition remains conditional on shareholder approval and other customary conditions precedent, including third-party consents and royalty agreements. A general meeting is expected in early 2026 to seek approval for the placement shares, options, and the issuance of shares to the vendors of Minerals U Pty Ltd, the entity holding Zydeco rights.

Investors will be watching closely as Galilee transitions from exploration in Australia to production readiness in the US, a move that could redefine its growth trajectory and market positioning.