Echelon prepares Palm Valley 14 for first gas before month-end

PV-14 Moves From Appraisal Into Production

Echelon Resources (ASX:ECH) has converted its latest Palm Valley appraisal success into a near-term production opportunity, with the PV-14 well now being tied into the Palm Valley Production Station. First gas is expected before the end of October 2026, and Echelon estimates the connected well could produce 3-4 terajoules a day.

The result gives the company an operational milestone to point to after its Palm Valley appraisal campaign received A$10.4 million of FY26 capital allocation for appraisal and development. PV-14 was drilled to a total depth of 2,942 metres measured depth on 14 September and targeted gas-bearing intervals and fractures in the Pacoota P1 Formation on the northern flank of the field.

Flow Test Shows Gas With No Recorded Water

The deviated well intersected gas flows over approximately 837 metres along the wellbore. An open-hole flow test across the 2,102.5-metre to 2,729-metre measured-depth interval recorded approximately 3 million standard cubic feet per day on a 100% joint-venture basis, through a three-quarter-inch choke over 90 minutes.

No water or oil was recorded during that test. The flow rate had not stabilised and was still increasing slowly at the end of the test, when flowing tubing-head pressure was 210 pounds per square inch. That makes the result encouraging, but not yet a settled production-rate measure.

Water Isolation Adds a Qualification

Drilling operations were extended to isolate formation-water ingress at the toe of the well using open-hole packers. After initial running problems, two packers were successfully set, with flow testing indicating that the ingress had been shut off.

Trace water was later detected during completion operations. Echelon said it inferred this was clean-up of water produced during the underbalanced shutoff work rather than water entering from behind the isolation packers. Sustained production and continued clean-up will therefore be important tests once PV-14 is online.

PV-15 Holds the Larger Capacity Test

The Ensign 974 rig is preparing to move on to Palm Valley 15, the next well in the programme. Echelon said additional success at PV-15 is expected to return field production towards the processing facility's approximate 14 TJ/d capacity and deliver at least 10 petajoules of gas on a 100% joint-venture basis.

Gas from PV-14 will be sold into the Northern Territory market under a supply agreement negotiated with the Northern Territory Government in April 2026. Echelon will review the campaign's effect on reserves and production guidance after PV-15 has been drilled, leaving the final value of the programme dependent on both sustained PV-14 performance and the next well's result.