Galilee Energy Advances Zydeco Gas Project to Drill-Ready Status

Zydeco Gas Project Nears Drilling Phase

Galilee Energy (ASX:GLL) has pushed its Zydeco Gas Project in Louisiana into a drill-ready phase, setting the stage for a Q2 2026 spud of the Zydeco-1 well. The project now benefits from consolidated acreage that allows for optimised well placement and development planning, a critical step in reducing operational risks and costs. This progress marks a significant shift from acquisition and planning to imminent execution in the company’s US Gulf Coast growth strategy.

The Zydeco-1 well targets up to 8 billion cubic feet (Bcf) of natural gas and 0.5 million barrels of condensate, with technical work confirming multiple stacked pay zones across the Upper and Lower Tweedel formations. The well’s location was finalised after a comprehensive 3D seismic interpretation program, which enhanced reservoir definition and identified additional upside potential in the Homeseeker B sand interval. This subsurface de-risking underpins the confidence in the project’s resource potential and development plan.

Strategic Partnerships and Advisory Board Strengthen US Focus

Galilee has bolstered its US operations by appointing a high-calibre Advisory Board composed of seasoned oil and gas operators and technical experts. This board is tasked with guiding asset evaluation, drilling execution, and commercial structuring, effectively positioning Galilee as a credible local operator in the competitive Gulf Coast market. Complementing this governance upgrade, the company secured key technical partnerships, including a Master Service Agreement with US drilling consultants and a cooperation deal with Louisiana-based Kitty Hawk, enhancing access to proprietary subsurface data and regional opportunities.

This strategic build-out supports Galilee’s ambition to replicate a proven Gulf Coast redevelopment model focused on low-risk, near-term production wells that generate early cash flow and enable repeatable growth. The company’s approach aligns with market dynamics, where US gas demand is rising due to LNG export expansion, increased power consumption, and data centre development. Galilee’s move into execution is underpinned by a solid cash position of $6.58 million as of March 31, 2026, and a disciplined exploration spend of $0.673 million during the quarter.

Operational Readiness and Cost Optimisation

Galilee has advanced multiple operational fronts to ensure Zydeco-1 is ready to drill. Rig inspections and contractor shortlisting have identified preferred options, with Rig 14 highlighted as the prime candidate. Site inspections confirmed favourable conditions, including proximity to existing roads and pipeline infrastructure, facilitating a straightforward tie-in to the Texas Gas Pipeline. The development concept leverages simple processing facilities and established regional pricing benchmarks, targeting first production within approximately six months of a successful well.

Post-quarter, the company finalised the well design and directional drilling plan, delivering about US$100,000 in cost savings through optimised casing design and further reducing technical risk ahead of spudding. The finalisation of the Authorisation for Expenditure (AFE) is underway, keeping the project on track for its Q2 2026 drilling commencement. This operational progress builds on the company’s recent finalised Zydeco-1 well design and the earlier appointment of the US Advisory Board, both instrumental in advancing the project.

Resource Base and Market Exposure

The Zydeco Gas Project’s prospective resource base is estimated at a mean of 8.4 Bcf of gas and 430,000 barrels of condensate gross, with net prospective volumes after royalties around 5.88 Bcf and 301,000 barrels respectively. These estimates are un-risked and reflect a 75% chance of discovery and development, underscoring the speculative nature of the resource until drilling results are confirmed. The project’s exposure to Henry Hub natural gas pricing and WTI/LLS oil benchmarks situates it well within a premium US energy market, providing potential leverage to favourable commodity price movements.

Galilee’s strategy to target low-cost, near-term production with rapid payback supports its aim to become a cash-generative US producer. The company’s ability to scale through repeatable drilling and regional expansion hinges on the success of Zydeco-1 and subsequent appraisal activities. Investors will be watching closely as Galilee transitions from planning to execution in this promising US gas-condensate play.