3D Energi Strikes Major Otway Basin Gas Discoveries but Faces Funding Crisis

Significant Gas Discoveries in the Otway Basin

3D Energi Limited (ASX, TDO) has announced a promising update from its offshore Otway Basin exploration permits, with the Essington-1 well marking the first gas discovery in the region since 2021. This discovery extends the proven gas fairway into the VIC/P79 permit area and is strategically located just 12 kilometres from existing infrastructure, potentially easing future development logistics.

The Essington-1 well encountered substantial gas-condensate columns in both the Waarre A and Waarre C reservoirs, with preliminary data indicating a favourable gas composition characterised by low CO₂ content (3–4%) and a high condensate-gas ratio. Formation testing confirmed effective deliverability, bolstering confidence in the reservoir's commercial potential.

Charlemont-1 Discovery Reinforces Exploration Strategy

Following Essington-1, the Charlemont-1 well also intersected gas across multiple reservoirs, confirming a second discovery within the VIC/P79 permit. Despite encountering higher-than-anticipated pressures that required well design modifications and extended drilling time, Charlemont-1’s results further validate the prospectivity of the Charlemont Cluster and the company’s infrastructure-led exploration approach.

Capital Raises and Financial Position

To fund these exploration activities, 3D Energi completed two placements during the quarter, raising a combined total of approximately A$23.9 million before costs. The funds have been allocated to drilling, formation testing, and general working capital. As of 31 December 2025, the company held nearly A$14 million in cash and cash equivalents.

However, the company disclosed challenges in meeting joint venture cash calls related to the drilling program. An outstanding balance of approximately US$2.5 million remains, with a further US$5.3 million due imminently. These funding shortfalls have led to a suspension of trading on the ASX until 6 February 2026 while 3D Energi addresses its financial position and potential implications for its joint venture interests.

Broader Exploration and Corporate Developments

Beyond the Otway Basin, 3D Energi continues to advance exploration in the Bedout Sub-Basin offshore Western Australia and is progressing seismic survey planning critical to future drilling campaigns. The company also maintains a gas storage project onshore South Australia, though it has paused new seismic acquisition there for now.

On the corporate front, the quarter saw the resignation of two non-executive directors and the appointment of Jesse Meidl, a seasoned investment banker and finance executive with extensive experience in capital raising and corporate governance across global markets. This appointment signals a strategic strengthening of the company’s financial leadership amid ongoing funding challenges.

Outlook and Market Context

3D Energi’s discoveries come at a time of tightening gas supply on Australia’s east coast, particularly in Victoria, where legacy fields are in decline and supply gaps are forecast from 2029. The company’s focus on local gas supply close to existing infrastructure aligns with market needs for reliable, lower-emission energy sources.

While the technical results are encouraging, the company’s near-term outlook hinges on resolving funding issues and successfully progressing its exploration program. The integration of full subsurface data and subsequent resource assessments will be critical to defining commercial viability and development pathways.