Metgasco’s Production Drops 25% as $5.9M Asset Sale Gets Shareholder Nod

Strategic Asset Sale Signals Major Shift

Metgasco Limited has taken a decisive step in reshaping its business by entering into a conditional agreement to sell its 25% non-operated interests in the Odin and Vali gas fields for $5.9 million. This transaction, approved overwhelmingly by shareholders in an extraordinary general meeting held on 14 January 2026, is expected to complete in the March quarter. The sale marks Metgasco’s exit from its core producing assets, effectively ending its substantial operational presence in these Queensland and South Australian gas fields.

Production Declines Amid Operational Challenges

During the December 2025 quarter, production from the Odin field averaged 1.91 million standard cubic feet per day (MMscfd), down from 2.16 MMscfd in the prior quarter. The Vali field also saw a decline, averaging 0.44 MMscfd compared to 0.58 MMscfd previously. Efforts to boost output through a Production Uplift Program have yielded mixed results, particularly at Vali-2 where water production and inconsistent gas flows have complicated performance. Despite these challenges, the company continues to evaluate technical strategies to improve reservoir productivity.

Financial Pressures and Debt Management

Metgasco’s financial position remains strained. Sales revenue for the quarter dropped 13% to $391,600, reflecting lower production volumes. The company ended the period with just $194,000 in cash against $6.08 million in debt, including secured and unsecured loans from Glennon Small Companies Ltd. Notably, the repayment date for convertible loans was extended to June 2026, providing some breathing room. The proceeds from the asset sale are earmarked primarily for debt reduction, a critical step to stabilise the company’s balance sheet.

Looking Ahead, New Business Development and Listing Compliance

With the sale completion, Metgasco will no longer hold substantial assets or operations, prompting a strategic pivot. The company is actively reviewing options including mergers, farm-outs, equity raises, and potential acquisitions to rebuild its business and maintain compliance with ASX listing rules. The board has signalled intent to identify new oil and gas opportunities or other business ventures within six months to avoid suspension of its securities. Cost-cutting measures, including reductions in executive remuneration and board fees, have also been implemented to conserve cash.

Market and Investor Implications

This transition period presents both risks and opportunities. While the asset sale provides immediate liquidity relief, the loss of producing assets raises questions about Metgasco’s near-term revenue prospects. Investors will be watching closely for announcements on new acquisitions or capital raisings that could define the company’s future trajectory. The company’s ability to secure suitable new assets or partnerships will be critical to restoring confidence and delivering shareholder value.