Galilee Finds a New Oil Path at Zydeco

Five Shallow Zones Move Ahead of Gas

Galilee Energy Limited (ASX:GLL) has redesigned its Zydeco-1 sidetrack around a previously unplanned shallow oil opportunity, putting five zones with up to 422.6 thousand barrels of gross 3U Prospective Resources ahead of the deeper gas-condensate targets that originally drove the well.

The estimate covers the Borsum, Richie, Discorbis gravelli, First Het and Homeseeker B sands. On a net-after-royalty basis, the 3U figure is 295.8 thousand barrels, while the mean estimate is 234.2 thousand barrels. Those volumes remain prospective, unrisked and undiscovered: testing is still required to establish whether movable hydrocarbons exist and whether they can be produced commercially.

Sidetrack Designed for Potential Oil Production

Galilee says oil has become the commercial priority because prevailing Louisiana Gulf Coast oil pricing is materially stronger than natural gas pricing. The company plans to configure the sidetrack as a potential oil production well, allowing a successful test to move towards completion without first redesigning the bore around the deeper gas-condensate objectives.

That sequencing choice reflects a practical completion issue rather than a stated downgrade of the deeper inventory. Galilee says the shallow oil intervals and the Stafford and Tweedel targets require different casing, perforation and production configurations. Testing both objectives in the same well could compromise the ability to optimise the oil zones, according to the company.

A$3.5 Million Placement Funds Next Drilling Step

The revised sidetrack and oil testing programme is expected to be funded from Galilee's recent A$3.5 million placement, with no additional capital currently anticipated for the programme. The next work involves finalising the trajectory, casing and completion design, arranging contractors and mobilisation, and completing formation evaluation across the five zones.

The programme remains subject to final engineering approval, contractor availability, regulatory requirements and normal operating risks. The original Zydeco-1 well reached about 9,393 feet before drilling was interrupted by a mechanical issue in the open-hole section; Galilee intends to reuse the existing surface casing, wellhead, location and permits.

Deeper Tweedel and Stafford Targets Remain

Galilee has not abandoned the deeper opportunity. Upper and Lower Tweedel retain gross 3U Prospective Resources of up to 13.7 billion cubic feet of gas and 610,000 barrels of condensate, while Stafford produced gas indications above the rig detector's 5,000-unit upper limit in the original hole. No Prospective Resource is currently assigned to Stafford.

A future dedicated well would be needed to evaluate and potentially produce those gas-condensate targets. For now, the investment case turns on whether the new shallow oil interpretation survives formation testing: the headline resource is sizeable enough to reshape the drilling plan, but it is not yet a discovery, a reserve or production.