Echelon Resources’ newly tied-in Palm Valley 14 well has seen its gas rate fall to around 0.5 TJ/d, well below the 3-4 TJ/d potential indicated by pre-completion testing. The joint venture is assessing whether water loading is limiting output while Palm Valley 15 continues drilling.
- PV-14 began flowing on 23 October 2026
- Gas rate has declined to around 0.5 TJ/d
- Pre-completion tests indicated potential of 3-4 TJ/d
- Joint venture is considering options to improve PV-14 performance
- PV-15 is drilling at 947 metres with total depth expected around mid-December
Palm Valley 14 rate drops after tie-in
Echelon Resources (ASX:ECH) has encountered an early production problem at Palm Valley 14, with the well’s gas rate declining to around 0.5 terajoules a day after it began flowing on 23 October. That is materially below the 3-4 TJ/d capability indicated by flow tests conducted before completion.
The well initially demonstrated a higher potential gas rate after being tied in, but the rate subsequently fell. Echelon said the decline may be due to water loading, while stressing that the ultimate production rate cannot yet be confidently assessed. The Palm Valley joint venture is considering options to improve well performance, but the announcement does not specify a remediation plan, cost or timetable.
PV-14 misses early production expectations
The result marks a sharp change from the picture presented in the PV-14 flow test, which recorded about 3 million standard cubic feet a day with no water or oil before the well was brought online. That earlier testing supported an estimated tied-in rate of 3-4 TJ/d, although the latest update makes clear that the completed well’s sustainable output remains unresolved.
The uncertainty matters because Palm Valley is central to Echelon’s near-term growth program. The company has been pursuing a two-well Palm Valley campaign, with gas volumes from the wells contracted for sale to the Northern Territory Government under an agreement announced in April 2026. The filing provides no revised production forecast for the field.
Palm Valley 15 continues toward mid-December depth
The second well, Palm Valley 15, is drilling ahead in line with expectations. It was at 947 metres measured depth in the 12¼-inch section at the time of the update, with total depth anticipated around mid-December.
That drilling progress offers a separate operational marker, but it does not resolve the immediate question surrounding PV-14: whether the lower rate is temporary, can be improved through intervention, or represents the well’s sustainable production profile. Further production data and the joint venture’s response to the possible water loading will determine how much of Palm Valley’s planned contribution can be relied upon.
Bottom Line?
PV-15 remains on schedule, but the next meaningful test for Echelon is whether PV-14 can recover from its early 0.5 TJ/d rate and establish a sustainable output level.
Questions in the middle?
- Is water loading confirmed as the cause of PV-14’s production decline?
- What intervention will the joint venture pursue, and when could its effect be measured?
- Will PV-15 reach its expected drilling milestones and help offset uncertainty around PV-14?