Australis Oil & Gas is gearing up for the Willson 1H appraisal well in the Tuscaloosa Marine Shale, backed by a US-listed partner funding the first $46.25 million work program. The company holds 47,300 net acres in the TMS core and reported steady production and a solid cash position at quarter-end.
- Willson 1H well permit approved and drilling targeted for Q4 2026
- 47,300 net acres held in TMS core with 84% held by production
- 62 million barrels of 2P+2C net reserves and resources
- Q2 production of 4,644 barrels from retained 10% working interest
- Cash and equivalents at US$11.2 million after $1.3 million payment to EQV
Willson 1H Well Permit and Drilling Plans
Australis Oil & Gas (ASX:ATS) has secured a crucial permit for its Willson 1H appraisal well in the Tuscaloosa Marine Shale (TMS), with drilling and completion now confirmed to proceed. The company’s US-listed development partner, a heavyweight in onshore unconventional basins, will carry Australis’ interest through the initial US$46.25 million work program. The spud date is set for Q4 2026, subject to rig availability, which has now been secured.
Preparations for the Willson 1H well are well advanced, including detailed drilling and completion design. Meanwhile, permit applications have commenced for a second carried well, Mathieu 1H, signaling steady progress in Australis’ appraisal and development agenda.
Robust Acreage and Reserves Position
The company’s footprint in the TMS core has expanded to 47,300 net acres, with 84% held by production (HBP), underscoring a strong position in a proven oil-producing area. Approximately 4,000 net acres due to expire in 2026 are subject to a one-year extension, with most expected to convert to HBP status through the carried well program.
Independent evaluation by Ryder Scott at the end of 2025 estimated Australis’ net 2P plus 2C recoverable oil volumes at 62 million barrels, including 165 thousand barrels of 2P producing reserves. This sizable resource base positions Australis well for future development, with around 160 net future drilling locations identified within its acreage.
Production and Financial Highlights
In Q2 2026, Australis reported production of 4,644 barrels of oil from its retained 10% working interest in producing wells within the TMS. This output was broadly in line with expectations. The company has transitioned operatorship of producing wells to EQV, retaining a non-operator status but actively managing its interests.
Financially, Australis ended the quarter with US$11.2 million in cash and equivalents, down from US$13.6 million in Q1 2026. The reduction reflects a US$1.3 million final adjustment payment to EQV, related to revenue and costs during the transition period. The average realised oil price was $96.90 per barrel, with an average achieved price excluding certain adjustments at $89.09 per barrel.
The company also recorded a modest hedge loss of US$0.031 million during the quarter, following the close-out of final hedges after selling 90% of its producing well interests to EQV at the end of 2025. Australis currently holds no active hedge positions but remains open to revisiting its hedging strategy as development progresses.
Strategic Developments and Market Dynamics
Australis continues to engage with its US development partner across drilling, completions, and production disciplines to advance the TMS program. The company’s leasing program within the Area of Mutual Interest (AMI) is progressing, supported by a US$1 million carried initial lease program managed by the partner.
Geopolitical tensions in the Middle East have exerted upward pressure on commodity prices and heightened focus on US domestic oil supply security, especially as the Strategic Petroleum Reserve nears historic lows. Australis sees increased market interest in quality undeveloped tight oil assets like the TMS and is exploring opportunities for further development beyond its current partnership.
Corporate and Operational Updates
The company announced a change of its registered office and principal place of business to Joondalup, Western Australia, effective 7 August 2026. Operationally, Australis has maintained a lean structure, with staff collaborating closely with its development partner to ensure seamless execution of the appraisal and development program.
Bottom Line?
Australis is poised to unlock value from its TMS assets with the upcoming Willson 1H well, but execution hinges on rig availability and market conditions.
Questions in the middle?
- Will the Willson 1H well confirm the anticipated resource potential in the TMS core?
- How will ongoing geopolitical tensions influence Australis’ development pace and commodity pricing?
- What are the prospects for Australis expanding its footprint or partnerships beyond the current AMI?