Australis Oil & Gas has moved its first carried Tuscaloosa Marine Shale well closer to drilling, with contracts largely awarded and permits approved for two follow-on wells. A rig remains the key unresolved item before the targeted Q4 2026 spud.
- Willson 1H approved for execution by development partner
- Most drilling, facilities and long-lead contracts secured
- Mathieu 1H and Baker 1H permits approved
- 48,725 net acres held, 84% held by production
- US$10.1 million cash and first carry-program advance received post-quarter
Willson 1H moves into execution planning
Australis Oil & Gas (ASX:ATS) has cleared several practical hurdles for the first well under its carried TMS development program, but the timetable still hinges on finding a rig. The company says its development partner has approved planning and execution of the Willson 1H initial test well, while most drilling and facilities contracts have been awarded and long-lead equipment has been secured.
Rig procurement is now the critical path. Australis has identified suitably specified rigs that could support a targeted Q4 2026 spud, but says the market has tightened and existing contract holders are retaining 30-day extension options. The company is waiting for several of those options to resolve, meaning Q4 remains a target rather than a confirmed drilling date. The progress builds on the US$46.25 million farmout program, which earlier coverage said was intended to fund the carried development work.
Two additional wells receive permits
Regulatory progress has extended beyond Willson. The Mississippi State Oil & Gas Board approved permits for the Mathieu 1H and Baker 1H wells at hearings in August and September. Both are planned from the same pad as Willson 1H and have been permitted as 10,000-foot laterals, giving Australis three permitted units associated with the initial program.
The company ended the quarter with 48,725 net acres in the TMS Core, including 649 net acres added through the carried initial leasing program. Some 40,782 acres, or 84% of the position, is held by production. Around 7,900 acres remain term leases with expiry dates extending to 2031; Australis said about 4,000 net acres due to expire in 2026 have a one-year extension option, with most expected to convert to held-by-production status if the three permitted wells are drilled.
Production remains modest as development takes centre stage
Australis sold 6,060 barrels during the quarter from its retained 10% or less working interests in 48 producing TMS wells, generating US$0.525 million in sales revenue. Production was broadly in line with expectations and no workovers were undertaken. Cash and equivalents stood at US$10.1 million at 30 September, down from US$11.2 million in the prior quarter after leasing payments and long-lead procurement spending.
Australis paid US$0.481 million during the quarter for leasing costs and Willson-related long-lead items, with those amounts recoverable under the carry arrangements. The receivable from its development partner was US$0.276 million at quarter-end, and the company said it received the first advance payment under the carry-program funding arrangements after the reporting period. That support is important as the company prepares for a development phase that has not yet produced drilling results.
Bottom Line?
Australis has converted much of the Willson 1H plan into contracts and permits; the next material proof point is a signed rig contract and confirmed spud, not another planning milestone.
Questions in the middle?
- Will a suitable rig become available in time to preserve the Q4 2026 spud target?
- What production and cost profile will the Willson 1H test well deliver once drilled and completed?
- Will drilling the three permitted wells convert most of the 2026-expiring acreage to held-by-production status?