Cue Energy Resources trimmed its 2P reserves by 9% to 4.5 million barrels of oil equivalent as of June 2026, driven by production and downward revisions across key assets. The company flagged a $3-$5 million non-cash impairment tied to Maari and Sampang fields amid a strategic exit from the Sampang PSC.
- 2P reserves down from 5.5 to 4.5 MMboe after FY26 production and technical revisions
- Mahato reserves increased by 0.2 MMboe; declines at Sampang, Maari, and Mereenie
- 2C contingent resources cut 30% following Sampang PSC withdrawal
- New 0.7 MMboe prospective gas resources identified at Mereenie
- Non-cash impairment of $3-$5 million expected for Maari and Sampang assets
Cue Energy’s 2P Reserves Shrink Amid Portfolio Reassessment
Cue Energy Resources Limited (ASX:CUE) reported a 9% drop in its 2P reserves to 4.5 million barrels of oil equivalent (MMboe) as of 30 June 2026, down from 5.5 MMboe a year earlier. This decline reflects 0.6 MMboe produced during the financial year and a net downward revision of 0.4 MMboe following updated technical and commercial evaluations across its asset base.
The updated reserve estimates were prepared under the Society of Petroleum Engineers Petroleum Resources Management System (SPE PRMS) 2018 guidelines, with Horizon Oil Limited’s reserves management processes now underpinning Cue’s reporting after Horizon’s takeover and board changes earlier this year. The revisions chiefly stem from technical reassessments rather than fundamental changes in field performance, aligning with Horizon’s previous valuation assumptions for joint assets such as Maari and Mereenie.
Asset-Level Reserve Movements Reflect Operational and Strategic Shifts
Reserve changes were mixed across Cue’s portfolio. Mahato saw a 0.2 MMboe increase in 2P reserves, credited to new infill drilling opportunities within the Bekasap Formation. Conversely, Sampang’s 2P reserves fell by 0.2 MMboe, largely due to the deferment of the Grati booster compressor project into FY2027 and Cue’s announced plan to exit the Sampang Production Sharing Contract (PSC) upon licence expiry in December 2027.
Maari’s reserves dropped by 0.2 MMboe, reflecting unscheduled downtime and updated economic assumptions forecasting the end of economic production by 2030. Mereenie’s 2P reserves declined by 0.4 MMboe following a performance-based reservoir assessment and evaluation of infill drilling prospects in the Pacoota Formation.
Contingent and Prospective Resources Adjusted in Line with Licence Strategy
Consistent with its planned withdrawal from the Sampang PSC, Cue removed 2.4 MMboe of 2C Contingent Resources related to the Paus Biru and Jeruk fields, trimming total 2C resources by 30% to 3.9 MMboe. Meanwhile, new prospective gas resources have emerged at Mereenie, with an unrisked 2U estimate of 0.7 MMboe identified in the stacked reservoir sequence of the Mereenie Footwall. This highlights exploration upside potential within the asset, though these volumes remain subject to discovery and development risks.
Impairment Charges and Capital Write-Offs Signal Financial Impact
Reflecting the reserve downgrades and strategic shifts, Cue expects to book a non-cash impairment charge between $3 million and $5 million in its FY26 financial statements, primarily related to the Maari and Sampang assets. This estimate remains subject to final audit and board approval. Additionally, Cue has written off approximately $4 million in capitalised costs linked to the Paus Biru project following its decision to exit this development.
CEO Matthew Boyall emphasised the company’s focus on disciplined investment and maximising value from its diversified portfolio, noting that the reserve revisions also underscore new drilling opportunities at Mahato and prospective gas at Mereenie.
Bottom Line?
Cue’s reserve downgrade and impairment reflect operational realities and strategic repositioning, setting the stage for FY26 financials that will clarify the impact of Horizon Oil’s ownership and the Sampang exit.
Questions in the middle?
- Will the new prospective resources at Mereenie translate into viable development projects?
- How will the planned withdrawal from Sampang PSC affect Cue’s production profile post-2027?
- What are the implications of the impairment charges for Cue’s near-term capital allocation?