Australian Oil Completes Surat Basin Acquisition and Starts Crude Lifting

Surat Basin Acquisition Finalised with Operational Transition Underway

Australian Oil Company Limited (ASX:AOK) has completed the acquisition of key petroleum assets in Queensland's Surat Basin from ADZ Energy and OGT Energy, marking a significant expansion of its production and exploration footprint. While the transaction is unconditional and operational control has transitioned, formal transfer of petroleum leases and pipeline licences remains subject to regulatory approval, with no outstanding issues reported by the regulator. The portfolio includes PL 264 (Emu Apple Oil Field), PL 30 (Riverslea Oil Field), PL 512 (Major Gas Field), and PPL 22 pipeline access to the Silver Springs Gas Plant, all situated near established infrastructure and producing basins.

Production from Emu Apple-1 currently runs at 15–20 barrels per day of 35° API oil, with infrastructure deemed serviceable for current levels. The company is evaluating workover programs on suspended wells Emu Apple-2 and Emu Apple-3, aiming to boost output through pump optimisation and water shut-off strategies.

Crude Oil Lifting Agreement and First Shipment Exceed Expectations

In March, Australian Oil executed a 12-month crude oil and condensate lifting agreement with IOR Energy Pty Ltd, tying sales price to Brent crude benchmarks converted to Australian dollars. IOR operates the Eromanga Oil Refinery, which has spare capacity to process additional volumes. On 31 March 2026, the company completed its first crude oil lifting from Emu Apple, with approximately 600 barrels transported, significantly above the initially anticipated 400 barrels. This volume reflects longer intervals between liftings and stored inventory.

Based on April data, Brent crude oil prices averaged between AUD $147 and $149 per barrel, providing a favourable pricing environment for the company’s production. Australian Oil is also progressing assay work and separate lifting arrangements with IOR for Riverslea and Yapunyah production, aiming to replicate the Emu Apple commercial framework.

Exploration Advances Highlight Iodine Anomalies and Undrilled Plays

Technical assessments across PL 30 and PL 264 have identified multiple geochemical and seismic anomalies. A preliminary review integrating historical iodine surface sampling and seismic amplitude data revealed several iodine anomalies coincident with hydrocarbon indicators at the Boxvale sandstone level, particularly near the Annabelle high and west of Riverslea. These anomalies suggest potential stratigraphic traps and undrilled plays, which are considered higher risk but carry substantial upside if successful.

Seismic amplitude anomalies also highlight sand pinchouts at multiple reservoir levels, supporting the maturation of new drilling targets. The company is compiling a comprehensive inventory of development and exploration opportunities, including resource volumetric analysis across Emu Apple, Riverslea, and Yapunyah. Meanwhile, PL 512’s Major Gas Field shows encouraging signs of undrained gas potential adjacent to existing infrastructure, with further resource estimates pending.

Capital Raising Supports Growth and Operational Plans

To fund ongoing exploration, production optimisation, and corporate activities, Australian Oil announced a $2.03 million capital raising in two tranches, with the first tranche completed under placement capacity and the second subject to shareholder approval. Participants in the raising will receive options exercisable at $0.006, also pending shareholder endorsement. This funding boost is critical given the company’s current cash runway of just over one quarter, with planned increases in operational and investing expenditures in the Surat Basin assets.

The company’s strategic focus remains on balancing near-term cash flow from producing assets with longer-term exploration upside, including selective new ventures in Australia and internationally. The recent appointment of Neil Taylor as New Business Manager East Africa underscores this frontier exploration emphasis, targeting large gas opportunities in favourable jurisdictions.

Australian Oil’s Surat Basin acquisition and operational progress build on its recent $2 Million Capital Raise Fuels Australian Oil's Surat Basin Ambitions and follow the earlier Australian Oil Co Secures 12-Month Lifting Deal for Emu Apple Production, cementing a foundation for growth in Queensland’s established hydrocarbon province.