Echelon Resources has spudded the second and final well in its Palm Valley appraisal campaign, targeting the south flank of the Northern Territory gas field. The company expects the two wells to restore facility capacity to about 14 TJ a day and support at least 10 PJ of gas production, although both drilling and tie-in work remain incomplete.
- PV-15 spudded on 18 October 2026
- 51-day drilling schedule to 3,114 metres
- Deviated well targets Palm Valley’s south flank
- PV-14 and PV-15 expected to support 14 TJ/d capacity
- Gas to be sold under Northern Territory government agreement
PV-15 completes Palm Valley appraisal campaign
Echelon Resources (ASX:ECH) has started drilling Palm Valley 15, the second and final well in its planned two-well appraisal programme. Ensign Rig 974 spudded the well on 18 October, giving the company a clear operational milestone as it works to bring more gas through the Palm Valley processing facility.
PV-15 is scheduled to take about 51 days to reach a planned total depth of 3,114 metres below the rotary table, equivalent to roughly 2,031 metres true vertical depth. The deviated well will be drilled at an angle of about 78 degrees through the Pacoota Formation reservoir, targeting the south flank of the Palm Valley gas field.
Two wells underpin planned 14 TJ/d facility output
The expected prize is not an immediate production increase but a potential return towards the processing facility’s stated capacity of approximately 14 terajoules a day on a 100% joint venture basis. Echelon says PV-14 and PV-15 are expected to produce at least 10 petajoules of gas, though those figures remain forward-looking while PV-15 is still being drilled and PV-14 has yet to complete its tie-in.
The company previously reported that the PV-14 gas producer was expected to deliver an initial 3-4 TJ/d once connected. Echelon’s latest announcement says the tie-in is ongoing, leaving the timing and actual rate of the first well as an important near-term test alongside PV-15’s drilling results.
Northern Territory government to take Palm Valley gas
Gas from the campaign is intended to be sold to the Northern Territory Government under a Gas Supply Agreement announced in April 2026. That gives the planned production a stated sales channel, but the announcement does not provide an updated date for first production, drilling costs, or a new reserves certification.
Palm Valley permit OL3 is operated by Central Petroleum, which holds a 50% interest. Echelon Palm Valley holds 35% and Cue Palm Valley holds 15%. Echelon’s share of the campaign therefore sits within a joint venture structure, while the production and capacity estimates in the announcement are presented on a 100% joint venture basis.
Drilling results and PV-14 tie-in are the next tests
The immediate sequence is straightforward but not yet complete: PV-15 must reach target depth and establish whether the south-flank target performs as expected, while PV-14 must be tied into the processing facility and deliver its initial gas rate. A successful campaign could move Palm Valley closer to its stated capacity, but the company has not yet converted those expectations into production.
Bottom Line?
The campaign has reached its final drilling stage, but the investment case now depends on PV-15 results, the PV-14 tie-in and demonstrated gas rates rather than planned capacity alone.
Questions in the middle?
- Will PV-15 confirm commercially useful gas through the targeted south-flank section?
- When will PV-14 complete tie-in and what initial rate will it achieve?
- Can the two wells ultimately support the stated 14 TJ/d facility capacity and 10 PJ production estimate?