Cue Energy Resources posted a solid quarter with a 16% production rise and $13.6 million cash receipts, backed by new drilling and a refreshed board after Horizon Oil's takeover.
- Total production up 16% to 138.1 kboe
- Quarter-end cash increased to $15.7 million
- Drilling underway at Palm Valley and Mahato
- Horizon Oil secures 57% ownership and board seats
- Long-term gas sales contract supports revenue to 2034
Production Recovery and Growth Drivers
Cue Energy Resources (ASX:CUE) closed the June quarter with a notable 16% lift in total production to 138.1 thousand barrels of oil equivalent (kboe), fueled by a strong rebound at its Indonesian Mahato field and a successful workover at New Zealand's Maari asset. Mahato's net oil output surged to 53,849 barrels, recovering from infrastructure disruptions that hampered the previous quarter, while Maari production rose 12% to 19,072 barrels following the MN1 well intervention.
This production uptick translated into a 13% increase in cash receipts to $13.6 million, underpinning a robust quarter-end cash position of $15.7 million. The improved cash flow provides Cue with financial flexibility as it embarks on an active development phase aimed at sustaining and growing output.
Active Drilling Programs Target Near-Term Growth
Drilling activity is ramping up across Cue's core assets with four wells underway or planned. In the Northern Territory, the Palm Valley JV has commenced drilling the PV-14 appraisal well, the first of two designed to unlock additional gas resources and support Cue's long-term gas supply contract with the Northern Territory Government. First gas from PV-14 is targeted for October 2026, with the program expected to span about four and a half months.
In Indonesia, Mahato's development campaign is progressing with the PB-41 infill well already drilling since July, targeting the Bekasap reservoir. A second approved development well is set to follow immediately, continuing a two-month program aimed at boosting production. The operator is also preparing for a Phase 3 development plan to tap into new reservoirs, pending government approval expected in the first quarter of FY2027.
Long-Term Contract Secures Gas Revenue Stream
Cue’s gas business in Australia benefits from a recently executed long-term Gas Sales Agreement with the Northern Territory Government, locking in contracted gas sales through to 2034. The contract features fixed pricing with CPI escalation and take-or-pay provisions, adding a layer of revenue certainty. This agreement underpins the rationale for the Palm Valley drilling campaign and strengthens Cue's Australian gas portfolio.
Corporate Changes Following Horizon Oil Takeover
The quarter also saw a significant corporate development as Horizon Oil Limited completed its takeover, acquiring a 57.03% stake in Cue. This transition brought a refreshed board with four new directors appointed on 2 July 2026, including Bruce Clement and Richard Beament, who bring extensive expertise in oil and gas exploration and capital management. The new leadership team signals a potential shift in strategic focus, emphasizing maximising value from existing assets and disciplined investment in development opportunities.
CEO Matthew Boyall highlighted the company's strong balance sheet and active drilling programs as key pillars entering FY2027, positioning Cue for sustainable production and cashflow growth under the new ownership structure.
Bottom Line?
Cue’s strengthened production and cashflow, coupled with Horizon Oil’s majority control, set the stage for an active development agenda and potential strategic shifts in FY2027.
Questions in the middle?
- Will Mahato’s Phase 3 development secure government approval and deliver the anticipated production uplift?
- Can the Palm Valley drilling campaign fully realise the contracted gas volumes to underpin long-term revenue?
- How will Horizon Oil’s majority ownership influence Cue’s capital allocation and growth strategy moving forward?