Equus reports $25 million loss as Equus Gas moves toward FEED

Alcoa Agreement Adds Commercial Support, But Remains Conditional

Equus Energy Limited (ASX:EQU) has moved the Equus Gas Project closer to commercialisation, but not yet to construction. The company executed a conditional Gas Sales Agreement with Alcoa of Australia on 13 August 2026 for approximately 50 terajoules of gas per day over 10 years following project start-up. The agreement forms part of a broader arrangement that could provide up to US$30 million in funding for Pre-FEED and FEED work.

The annual report makes clear that the Alcoa deal is not yet an unconditional revenue stream. The Gas Sales Agreement remains subject to Gate 3 conditions, including further technical work, regulatory progress, a project operator, a strategic partner and binding processing arrangements. Alcoa can terminate the broader funding arrangements if the required conditions are not met by the applicable deadline, meaning the agreement offers commercial support while leaving Equus with material execution risk.

Pre-FEED Sets Out Two Tie-Back Routes

Equus says its May 2026 Pre-FEED study confirmed a technically feasible and capital-efficient development concept for the offshore Western Australian resource. The project is designed around existing North West Shelf infrastructure, with potential tie-backs through Woodside-operated Pluto facilities or Santos-operated Varanus Island infrastructure. The company says both routes could provide access to LNG exports and the Western Australian domestic gas market.

The development concept targets gross production of approximately 350 MMscf/d, including up to 50 TJ/day for the domestic market, 2 million tonnes per annum of LNG exports and initial condensate production of about 12,000 barrels per day. Those are project design targets rather than operating results. Equus remains pre-FID, and its 1,702 Bscf of 2C gas and 38 MMstb of condensate are unrisked contingent resources classified as Development Unclarified, not reserves.

Losses, Rehabilitation and Tenure Risks Remain Material

The financial statements illustrate the cost of the transition from Copper Strike into an oil and gas developer. Equus reported a $25.0 million net loss for the year, including $7.6 million of reverse-listing transaction costs, $4.7 million of exploration and evaluation expenditure and a newly recognised $12.0 million rehabilitation provision for the Glenloth-1 well. The provision assumes plugging and abandonment in 2033, although the timing and method remain subject to further engineering.

Cash stood at $13.4 million at 30 June 2026, after the company raised $15 million before costs in connection with its December 2025 relisting and received $2.2 million from Alcoa. Equus says it will assess a mix of equity, debt and strategic partnerships as it advances towards FEED and FID. That funding requirement sits alongside the need to secure third-party processing, pipeline and LNG infrastructure access.

There is also a near-term tenure test. The WA-70-R retention lease, which holds the key gas fields, was due for renewal in October 2026 and the application was still under assessment at the reporting date. Equus says a refusal would leave it 12 months to apply for a production licence, but failure to secure either pathway could prevent the project from meeting its stated objectives. The next phase therefore depends on more than engineering: it requires tenure, partners, funding and Alcoa’s Gate 3 conditions to line up before the large resource can become a producing asset.