Amplitude Energy lifted gas prices and revenue to new quarterly highs in Q3 FY26 while pushing ahead with the East Coast Supply Project, despite mixed exploration results. The company’s production remains robust with capacity expansions at Orbost and development drilling in Cooper and Otway basins.
- Q3 FY26 revenue hits record $74.1 million on 4% higher gas prices
- Orbost Gas Plant surpasses prior capacity with 71 TJ/day average
- East Coast Supply Project drilling underway, first gas targeted for 2028
- Capital expenditure surges to $79.8 million, driven by ECSP exploration
- Net debt falls sharply to $39.2 million amid strong cash flow
Record Revenue Driven by Higher Gas Prices and Spot Sales
Amplitude Energy (ASX:AEL) posted a record quarterly revenue of $74.1 million in Q3 FY26, a 3% increase on the prior quarter, fuelled by a 4% lift in average realised gas price to $10.74/GJ. This beat the company’s own previous benchmarks, supported by a record 2.1 PJ of spot gas sales, equivalent to nearly 24 TJ/day. The company’s strategy to optimise spot gas sales by timing deliveries into higher-priced markets and periods of peak demand helped offset softer spot prices in some southern markets during the quarter.
Oil and condensate sales also rebounded, with volumes nearly doubling quarter-on-quarter to 19,005 barrels sold at an average price of A$136.77/bbl, contributing $2.6 million in liquids revenue. Meanwhile, total gas and liquids sales volumes were slightly down 2% quarter-on-quarter at 6.78 PJe, reflecting planned maintenance in the Otway Basin.
Orbost Gas Plant Surpasses Capacity Records Amid Operational Improvements
The Orbost Gas Processing Plant (OGPP) in the Gippsland Basin continued to impress with production trials exceeding its prior nameplate capacity of 68 TJ/day. The plant set new records with a 7-day average production rate of 71.0 TJ/day and a 30-day average of 70.2 TJ/day during the quarter. Following a chemical cleaning of sulphur absorber units and replacement of key plant parts after quarter-end, further capacity gains are anticipated in Q4.
Amplitude Energy also completed cost-effective visual inspections of the Sole and Patricia Baleen offshore pipelines using remotely controlled marine vessels, enhancing operational oversight while remaining under budget.
Mixed Exploration Results but ECSP Remains on Track for 2028
The East Coast Supply Project (ECSP) drilling campaign in the Offshore Otway Basin commenced with the Transocean Equinox rig targeting the Elanora and Isabella prospects. While Elanora’s primary reservoir was water-bearing, the Isabella sidetrack intersected gas-bearing sands but flow test pressures did not support commercial development, leading to the well being plugged and abandoned.
Despite this setback, the company remains optimistic about the ECSP’s potential, with upcoming drilling of the Juliet exploration and Annie development wells scheduled for the second half of 2026. The project’s front-end engineering design (FEED) is complete, and the development phase remains on budget and schedule to deliver first gas by calendar year 2028. The recent signing of foundation gas sales agreements with EnergyAustralia and AGL Energy, committing to supply 30 PJ and 20 PJ respectively from ECSP production starting in H2 2028, underscores strong market demand and commercial progress. These deals are conditional on exploration success and final investment decisions, reflecting the project’s ongoing risk profile. The foundation contracts were highlighted in the company’s recent 20 PJ gas deal with AGL and a similar agreement with EnergyAustralia earlier in March.
Development Progress in Otway and Cooper Basins Supports Production
Maintenance activities in the Otway Basin temporarily reduced production by 10% on a daily average basis, but the reactivation of the Casino-4 well provided an immediate boost and is expected to extend field life. The Athena Gas Plant’s annual maintenance is scheduled for late April.
In the Cooper Basin, oil production increased 6% quarter-on-quarter to an average of 200 barrels per day (net to Amplitude Energy’s 25% share), driven by successful tie-ins of three new Callawonga wells. These developments support the company’s steady production profile despite the challenging exploration environment.
Capital Expenditure and Balance Sheet Strength
Capital expenditure surged to $79.8 million in Q3 FY26, primarily reflecting ECSP exploration and appraisal costs of $72.6 million, a significant increase from prior quarters. Development expenditure also rose to $7.2 million. The company utilised the full $28 million carry from joint venture partner O.G. Energy for ECSP capex during the quarter.
Amplitude Energy’s liquidity position strengthened with cash reserves rising to $96 million and net debt falling sharply to $39.2 million, down 84% from the prior year. The company plans to fund ECSP capital expenditure through existing cash and organic cash flow over 2026-2028.
Bottom Line?
Amplitude Energy’s strong cash flow and capacity expansions position it well for ECSP’s critical drilling phase, but upcoming exploration results will be pivotal for the project’s final investment decision.
Questions in the middle?
- Will upcoming ECSP wells deliver the exploration success needed to underpin the final investment decision?
- How will Amplitude Energy balance rising capital expenditure with maintaining its strong liquidity position?
- Can the Orbost Gas Processing Plant sustain production above 70 TJ/day long term amid ongoing debottlenecking?