Galilee Energy Sets July Spud for Zydeco-1, Launching Gulf Coast Production Drive

Zydeco-1 Well to Kickstart Production in Louisiana

Galilee Energy (ASX:GLL) is poised to transition from explorer to producer with the imminent spud of its Zydeco-1 well in Louisiana, targeted for the first week of July 2026. The project is designed as a low-cost, low-risk gas-condensate development, with drilling and completion costs estimated at around US$4.8 million. Galilee aims for first production within six months post-spud, setting the stage for early cash flow generation.

The Zydeco-1 well targets the Upper Tweedel and Lower Tweedel reservoirs, known hydrocarbon-bearing formations with demonstrated production in offset wells. Positioned just 300 feet from the historical MacCabees et al-1 well, which flowed gas and condensate in the 1950s, Zydeco-1 benefits from existing infrastructure and a straightforward tie-in plan. This proximity reduces subsurface uncertainty and supports a drilling target with a proven reservoir.

Strategic US Advisory Board Bolsters Gulf Coast Ambitions

Supporting this push, Galilee has appointed a high-caliber US advisory board composed of seasoned oil and gas operators, technical experts, and commercial advisors. This board provides strategic guidance on asset identification, drilling execution, and capital efficiency, aligning with Galilee’s ambition to build a cash-flow-driven US oil and gas business. The advisory board also grants access to a pipeline of advanced hydrocarbon opportunities, positioning Galilee to pursue multiple follow-up projects pending Zydeco-1’s success.

A Proven Gulf Coast Roll-Up Model

Galilee’s strategy mirrors the successful playbook of Hilcorp and similar Gulf Coast operators, focusing on acquiring and redeveloping mature, undercapitalised fields. This approach emphasises disciplined execution, recycling capital from early production into further drilling, and scaling a profitable production base. Zydeco-1 serves as the proof of concept for this model, with several additional Gulf Coast opportunities already identified for rapid follow-up development.

The company’s focus on Louisiana taps into a premium energy hub with robust infrastructure, including pipelines, processing facilities, and export terminals. Louisiana’s gas demand is buoyed by LNG export expansion, rising power needs, and data centre growth, creating a supportive macro environment for Galilee’s gas and condensate production.

Resource Potential and Valuation Upside

Technical assessments estimate Zydeco’s net prospective resources at up to 9.59 billion cubic feet (Bcf) of gas and 497,000 barrels of condensate, net of royalties. These figures are un-risked and contingent on successful drilling and development, which Galilee estimates has a 75% chance of commercial success. The project’s low upfront capital and fast execution timeline underpin an attractive risk-reward profile.

Galilee’s market capitalisation sits at approximately A$10.9 million with $6.6 million cash on hand as of March 2026, implying an enterprise value of around A$4.3 million. The company’s transition into production is expected to drive a re-rating, as conventional oil and gas producers with liquids exposure typically command higher valuation multiples on the ASX.

Site Preparation Underway Ahead of Rig Arrival

Site works for Zydeco-1 are progressing on schedule with construction of the drilling pad, drainage infrastructure, and access improvements underway. The rig mobilisation by RFC Drilling’s Rig 103 is imminent, marking the start of drilling operations. This operational momentum supports Galilee’s near-term catalysts, including drilling, completion, well testing, and first gas production targeted within six months.

Success at Zydeco-1 will unlock a regional roll-up strategy, scaling production across the Zydeco structure and adjacent prospects. This approach aims to build a multi-well, cash-generative platform, leveraging early cash flow to fund further drilling and asset acquisitions.