NuEnergy Reports A$233k Operating Cash Outflow, Signs 1 MMSCFD Gas Sales Deal

Quarterly Cash Flow and Financial Position

NuEnergy Gas Limited’s latest quarterly cash flow report for the period ending 31 December 2025 reveals a net cash outflow from operating activities of A$233,000, alongside capitalised exploration and evaluation expenditure of A$1.073 million. Despite these outflows, the company closed the quarter with a cash balance of A$2.56 million, supported by fully drawn loans totaling A$3.144 million from related parties. These loans, provided by subsidiaries of the ultimate parent company GFB, carry a 10% interest rate and are unsecured but repayable on demand, highlighting a reliance on internal funding sources as NuEnergy advances its exploration activities.

Progress on Indonesian Coal Bed Methane Projects

NuEnergy’s Indonesian assets, particularly the Tanjung Enim Production Sharing Contract (PSC), are moving closer to commercialisation. The company has completed drilling four wells under its Early Gas Sales Initiative, targeting initial gas sales of 1 million standard cubic feet per day (MMSCFD). This initiative is a precursor to a broader production plan of 25 MMSCFD approved under the Tanjung Enim POD 1. The recent signing of a binding Gas Sales and Purchase Agreement with PT Perusahaan Gas Negara Tbk (PGN), Indonesia’s leading natural gas distributor, marks a significant milestone in monetising these assets.

Strategic Collaboration to Accelerate Development

In a strategic move to secure funding and expertise, NuEnergy entered into a collaboration agreement with PT Beijing Energy Linking (PT BJEL) in early January 2026. PT BJEL will act as the Lead Engineering, Procurement, Construction, and Commissioning (EPCC) contractor for the development of the Tanjung Enim and Muralim PSCs. Importantly, PT BJEL will finance 100% of the field development works at a capped contract price, with repayment structured through future gas sales. This arrangement provides NuEnergy with the certainty needed to accelerate execution and transition from early gas sales to full-scale production.

Outlook and Funding Considerations

NuEnergy expects to commence commercial gas sales in 2026, underpinning anticipated cash inflows. The company remains confident in its ability to raise additional capital if required to sustain operations and meet strategic objectives. The board continues to monitor cash flows closely and is prepared to adjust operational activities or pursue further funding to ensure long-term sustainability. While the current loan facilities provide short-term liquidity, the unsecured and on-demand nature of these loans introduces some financial risk that investors should watch carefully.