Australian Oil Company Limited has formalised a 12-month crude oil lifting agreement with IOR Energy for its Emu Apple Oil Field, paving the way for steady cash flow and further development in the Surat Basin.
- 12-month lifting agreement executed with IOR Energy Pty Ltd
- Sales price linked to Brent Oil benchmark converted to AUD
- Initial lifting of approximately 500 barrels expected within weeks
- Revenue to fund exploration and development in Surat Basin assets
- Potential for future lifting arrangements at Riverslea and Yapunyah
A New Commercial Framework for Emu Apple
Australian Oil Company Limited (ASX:AOK) has taken a significant step in commercialising its Emu Apple Oil Field production by signing a 12-month crude oil and condensate lifting agreement with IOR Energy Pty Ltd. This agreement establishes a clear and structured pathway for the sale of oil produced from the Emu Apple field, located within the Surat Basin, one of Australia's promising onshore hydrocarbon provinces.
The deal sets the sales price based on the monthly average of Brent Oil prices, converted into Australian dollars, ensuring that Australian Oil's revenue aligns with global market benchmarks. Payment terms require settlement within 21 days after the delivery month, providing a predictable cash flow timeline for the company.
Partnering with a Local Refinery
IOR Energy operates the Eromanga Oil Refinery, a facility with a long-standing history since 1986, processing up to 1,250 barrels per day of locally sourced crude. The refinery's location in a remote part of Queensland underscores the strategic importance of local supply chains and community engagement. Australian Oil's collaboration with IOR not only secures an offtake partner but also supports regional economic activity through employment and training opportunities.
Funding Growth and Exploration
The initial lifting under this agreement is expected within one to two weeks, with approximately 500 barrels of oil produced since late January 2026. The revenue generated will be reinvested into expanding production at Emu Apple and advancing exploration and development activities across other Surat Basin assets, including the Riverslea and Yapunyah fields. Australian Oil is actively progressing assay work at Riverslea with the aim of establishing a similar lifting arrangement, signalling potential growth in production capacity.
While the agreement provides a solid foundation for monetising current production, the company remains cautious, noting that any increase in production or new commercial arrangements will depend on technical evaluations, regulatory approvals, and market conditions. This prudent approach reflects the complexities of oilfield development and the need to balance ambition with operational realities.
Strategic Outlook
Managing Director Kane Marshall emphasised the importance of formalising offtake arrangements as part of a disciplined and commercially focused strategy. By securing cash flow positive revenue streams, Australian Oil is better positioned to fund its growth initiatives and deliver shareholder value. The company also continues to evaluate opportunities beyond Australia, including assets in California, aligning with its broader strategic objectives.
Bottom Line?
This lifting agreement marks a pivotal moment for Australian Oil, setting the stage for measured growth and sustained cash flow from its Surat Basin assets.
Questions in the middle?
- What are the expected production volumes and revenue forecasts for the next 12 months?
- How soon might lifting agreements for Riverslea and Yapunyah be finalised and what impact could they have?
- What regulatory or operational hurdles could affect the expansion of production in the Surat Basin?