Echelon Resources Limited reported a robust 7% revenue increase and a 61% rise in net profit after tax for H1 2026, driven by higher gas prices and strong field performance. The company also declared an interim dividend amid ongoing legal uncertainties.
- 7% revenue growth to AUD 57.2 million
- 61% increase in net profit after tax to AUD 6.0 million
- Mereenie field drives revenue uplift under new Gas Sales Agreement
- Interim dividend of AUD 0.40 cents per share declared
- Contingent legal claim from Triangle Energy Limited disclosed
Strong Revenue and Profit Growth
Echelon Resources Limited has delivered a solid financial performance for the half year ended 31 December 2025, with group revenue rising 7% to AUD 57.2 million compared to the prior corresponding period. This growth was primarily fuelled by higher gas prices secured under a new Gas Sales Agreement (GSA) signed in March 2025, with the Mereenie field in Australia playing a pivotal role by contributing a 33% revenue increase.
Net profit after tax attributable to shareholders surged by 61% to AUD 6.0 million, reflecting not only improved pricing but also operational efficiencies across the portfolio. This marks a significant turnaround from the previous period, which was weighed down by elevated exploration expenses in the Perth Basin and the Mahato Production Sharing Contract (PSC).
Financial Position and Cash Flow Dynamics
The Group’s net assets increased modestly by AUD 3.6 million to AUD 160.1 million, underscoring a stable balance sheet. Cash reserves stood at AUD 32.9 million, down from AUD 36.8 million at the previous half-year, mainly due to a strategic repayment of AUD 12 million in debt. Operating cash flows were slightly softer, declining 13% to AUD 21.8 million, influenced by the timing of cash receipts related to the Mahato field.
Echelon’s capital discipline is further evidenced by the payment of dividends totalling AUD 3.4 million during the period and the declaration of an interim dividend of AUD 0.40 cents per share, signalling confidence in ongoing cash generation.
Operational Highlights and Segment Performance
The Mereenie field’s strong performance under the new Northern Territory GSA was a key driver of the uplift, complemented by steady contributions from other assets including the Kupe oil and gas field in New Zealand and the Palm Valley and Dingo gas fields in Australia. Exploration activities were subdued, with no capitalised exploration expenditure during the half, reflecting a cautious approach amid market conditions.
Legal Contingency and Outlook
Notably, Echelon disclosed a contingent liability stemming from a legal claim by Triangle Energy Limited related to the Group’s withdrawal from certain permits in the Perth Basin. While the claim seeks specific performance rather than damages, the outcome remains uncertain. The company currently does not anticipate an outflow of economic benefits but will continue to monitor the situation closely.
The financial statements were reviewed by KPMG, who found no material issues, lending credibility to the reported results.
Bottom Line?
Echelon’s strong half-year performance and dividend declaration position it well, but the unfolding legal dispute warrants close investor attention.
Questions in the middle?
- How will the legal claim from Triangle Energy Limited impact Echelon’s future financials?
- What are the prospects for further revenue growth beyond the current Gas Sales Agreement?
- Will Echelon increase exploration activity or maintain a conservative capital approach?