Macallum New Energy turns seismic gains into a 2027 drilling test

Funding runway meets a larger drilling ambition

Macallum New Energy Limited (ASX:MNE) has a bigger Perth Basin portfolio to sell to potential partners, but it enters the next phase with a narrow cash buffer. The company held A$0.815 million at 30 September after spending A$1.009 million on operating activities during the quarter, leaving reported funding of just 0.8 quarters before its subsequent capital raising.

That pressure has been partly addressed through the A$3 million placement announced after quarter-end. The issue is priced at A$0.14 a share and is expected to lift pro forma cash to approximately A$3.8 million before transaction costs and further spending, assuming shareholder approval for the second tranche. MNE says the funds will support technical work, the EP 494 farm-out process and preparations for future drilling.

EP 494 now carries 1,860 PJ of 2U gas

The technical story has moved quickly since MNE completed its Barberton 3D and Condor 2D seismic surveys. An updated EP 494 estimate released in October put 2U prospective sales gas at 1,860 petajoules and 2U oil at 63.7 million barrels, on a 100% net-to-MNE basis. The portfolio's arithmetic mean gas estimate is higher at 2,506 PJ, reflecting the simple addition of individual prospect means.

The revised interpretation upgraded Gadee East and Gadee West from a single lead into two prospects, with combined mean prospective gas of 221 PJ, a 70% increase on the pre-3D estimate cited by MNE. Barberton Terrace Deep remains the largest part of the inventory, with a combined Permian and Triassic best-estimate prospective gas resource of more than 1,000 PJ. Those figures describe undiscovered accumulations, not reserves or discovered commercial resources, and remain subject to discovery and development risk.

Aberfeldy adds a substantial oil and gas option

The portfolio's most distinctive addition is Aberfeldy, where the maiden Aberfeldy resource was independently assessed during the quarter. MNE reports two mutually exclusive subsurface scenarios: an oil-bearing case with mean recoverable prospective resources of 52.6 million barrels of oil and 54 PJ of gas, or a gas-bearing case with 26.2 million barrels of oil and 142 PJ of gas.

“Cross Section showing Aberfeldy Prospect up-dip of Dandaragan-1 and Dandaragan Deep-1, both with oil shows.”

“Structural depth map of Aberfeldy Prospect (Intra-Yarragadee Formation).”

Caption and image © Macallum New Energy Limited. From “Quarterly Activities / Appendix 5B Cash Flow Report”, 30 Oct 2026.

The distinction matters. Only one fluid outcome can eventuate for the Intra Yarragadee reservoir, and further exploration is required to establish whether hydrocarbons are present in potentially recoverable quantities. MNE is nevertheless progressing planning for wells targeting Aberfeldy, Gadee East, Gadee West and Barberton Terrace Deep, while retaining a late-2027 drilling objective.

Farm-out process becomes the next commercial test

MNE has started a process to find a strategic joint venture partner that could earn an interest in EP 494 by contributing to the cost of up to two exploration wells in the second half of 2027. The company says multiple qualified parties are active in the process, which is expected to run through the end of 2026, although no transaction has been secured.

The next quarter therefore has two separate tests. Condor 2D seismic interpretation must convert a lightly explored area into a clearer prospectivity picture, while the farm-out effort must turn a technically enlarged portfolio into funded drilling. The placement buys time, but the scale and timing of exploration will still depend on capital discipline and the outcome of partner discussions.