US$17.33 million commitment removed as HyTerra exits Nebraska project

Nebraska exit removes US$17.33 million funding commitment

HyTerra Ltd (ASX:HYT) is walking away from its Nebraska earn-in, accepting an expected A$7.5 million non-cash impairment in exchange for removing a much larger future capital obligation. The company said it will withdraw from the Geneva Project joint development and earn-in agreement with Natural Hydrogen Energy LLC after funding US$2.67 million and earning a 16.03% interest.

Continuing the earn-in would have required HyTerra to provide a further US$17.33 million, comprising US$5 million for the first phase and US$15 million for the second, less amounts already funded. The company will lose its existing interest and recover none of the money spent to date, but it will have no further funding obligations under the agreement. The expected impairment is non-cash and relates to exploration expenditure capitalised in prior periods.

Kansas Rift Play becomes the central exploration bet

The capital freed by the exit is being directed towards the Kansas Rift Play, which underlies more than 80% of HyTerra’s Kansas acreage and is wholly owned and operated by the company. That focus follows McCoy-1 test results, which recorded low gas flow but helped HyTerra refine its view of the importance of proximity to interpreted hydrogen source rocks.

HyTerra says the Rift Play is closer to the interpreted Midcontinent Rift source rocks than the Ridge Play wells drilled to date. No further McCoy-1 appraisal or Ridge Play drilling is planned while the company completes its technical program, although the Ridge Play may be reassessed as that work develops.

Larson 1-14 drilling pushed into the 2027 season

Larson 1-14 remains a permitted, high-priority target, but drilling has been deferred. HyTerra is completing a program to rank and characterise all Rift Play targets using McCoy-1 learnings, external research, laboratory analysis and geological data before committing more capital.

The company is targeting a return to Larson 1-14 or a higher-ranked target during the 2027 drilling season, subject to the technical work, target selection and funding. Laboratory analyses have produced hydrogen from selected Midcontinent Rift rock samples under controlled conditions, but the release does not present those findings as a commercial resource estimate.

Independent Kansas resource audit due this quarter

HyTerra has engaged RISC Advisory to independently audit prospective hydrogen and helium resources across its Kansas leases. The review covers hydrogen and helium in the free gas phase, as well as stimulated hydrogen, and is expected to be completed in the fourth quarter of 2026. The company said no petroleum resource estimate is being reported in this release.

The audit is the clearest near-term technical checkpoint for the Kansas strategy. Its eventual disclosure, alongside the completed target-ranking work and well design, should provide more information on how much of the Rift Play thesis can be translated into drill-ready prospects.

Oman evaluation keeps international strategy alive

HyTerra is continuing to assess new US opportunities along the Midcontinent Rift and is progressing technical work in Oman with ARA Natural Resources under a non-binding March 2026 memorandum of understanding. The parties are evaluating the Semail Ophiolite using company and open-file data, with geological and geophysical work, field activities and data acquisition planned over the coming months.

The company’s recent cost reset, which it said reduced its recurring cost base and simplified its capital structure, now has a corresponding portfolio decision in the Nebraska exit. That discipline may preserve cash for projects under HyTerra’s control, but the trade-off is that the company has surrendered a project interest, booked a substantial accounting charge and postponed its next Kansas well while the technical case is rebuilt.