Cue Energy Secures Long-Term Gas Deal Amid Rising Profit and Dividend Payout
Cue Energy Resources reported a solid half-year profit increase to $5.11 million and declared a 0.25 cent interim dividend, while advancing a key gas supply agreement through 2034.
- Half-year profit after tax rises to $5.11 million
- Revenue dips slightly to $25.7 million amid production challenges
- Interim unfranked dividend of 0.25 cents per share declared
- Letter of Intent extended for long-term gas supply with NT Power and Water Corporation
- Ongoing development drilling planned in Australia and Indonesia
Financial Performance Highlights
Cue Energy Resources Limited has released its half-year results for the period ending 31 December 2025, revealing a nuanced performance marked by a modest revenue decline but a notable increase in net profit after tax. The company reported revenues of $25.7 million, down 5.2% from the previous corresponding period, primarily due to declining gas production in Indonesia and lower oil prices impacting New Zealand operations.
Despite this, profit after tax rose 18% to $5.11 million, supported by lower tax expenses and effective cost management. EBITDAX, a key performance metric excluding certain expenses, stood at $13.49 million, reflecting a decrease from the prior year but still indicating solid operational cash flow. Cash reserves increased slightly to $11.18 million, providing a stable liquidity position.
Operational Developments and Contractual Progress
Operationally, Cue’s Australian onshore assets in the Amadeus Basin delivered strong results, with revenue rising to $6.5 million thanks to higher gas contract prices and contributions from newly drilled wells. A significant development was the extension of a Letter of Intent (LOI) with the Northern Territory Power and Water Corporation (PWC) for gas supply agreements through to 2034. This LOI underpins plans for drilling four new production wells in 2026, which will be critical to sustaining and potentially growing production volumes.
In Indonesia, production from the Mahato and Sampang PSCs continues, though the latter faces declining output as fields near the end of their productive life. The installation of a compressor to enhance gas recovery at Sampang has been delayed but is expected to be completed soon. Meanwhile, development drilling in the Mahato PSC is progressing under approved plans, with further phases anticipated to commence in 2026.
Dividend and Shareholder Returns
The Board declared an interim dividend of 0.25 cents per share, payable on 26 March 2026. This dividend is unfranked and classified as Conduit Foreign Income, reflecting the company’s international earnings profile. Over the past two years, Cue has returned $33 million to shareholders, signalling a commitment to delivering shareholder value despite operational headwinds.
Outlook and Strategic Considerations
Looking ahead, Cue Energy is focused on executing its development plans in Australia and Indonesia while monitoring regulatory changes in New Zealand, particularly around decommissioning liabilities. The formalisation of the gas sales agreements with PWC remains a key milestone, as does the successful drilling and commissioning of new wells to support long-term production sustainability. Investors will be watching closely how the company manages declining production in some assets and leverages its operational strengths to maintain profitability.
Bottom Line?
Cue Energy’s blend of steady profits, strategic contract progress, and shareholder returns sets the stage for a pivotal 2026.
Questions in the middle?
- Will the formal gas sales agreements with NT Power and Water Corporation be signed as planned?
- How will delays in compressor installation at Sampang impact Indonesian production forecasts?
- What strategies will Cue deploy to counteract declining output in mature fields?
