Gulf Stream locks in Zydeco oil resources ahead of decisive flow testing

Zydeco oil estimates move from logs towards testing

Gulf Stream Energy Limited (ASX:GSE) has put numbers around the two oil discoveries made at its Zydeco-1 sidetrack in Louisiana, reporting a best-case contingent resource of 48,000 gross barrels for the Borsum Sand and 40,000 gross barrels for Homeseeker B. After the stated 30% royalty burden, those estimates fall to 33,600 and 28,000 barrels respectively. They are contingent resources, not reserves, and the company has not reported a combined total.

The estimates formalise the opportunity described in the company’s maiden Zydeco resources, but the central uncertainty is unchanged: Zydeco-1 has not flowed, and no formation-pressure data, fluid samples or production data were available from the well. Nearby wells provide supporting evidence for the interpretation, yet Gulf Stream explicitly cautions that those results do not predict Zydeco-1 performance.

Homeseeker B completion is the immediate decision

Homeseeker B is now the priority. Gulf Stream has prepared a completion AFE and says the zone can be tested with a workover rig on the existing cased wellbore. Flow testing and fluid sampling are intended to confirm producibility and provide the data needed to assess whether the resource can be converted into Proved, Probable or Possible Reserves.

The deeper zone contains five feet of interpreted net pay with average porosity of 24%. The shallower Borsum Sand contains 12 feet of net pay and average porosity of 32%, and could be completed later as a second production zone from the same wellbore. No development plan or completion decision has yet been approved.

Resource estimates remain below pre-drill expectations

The revised figures are not simply a confirmation of the pre-drill case. Gulf Stream says the current estimates are below the pre-drill gross best estimates dated 19 August 2026: 48,000 barrels versus 65,000 barrels for Borsum Sand, and 40,000 barrels versus 105,600 barrels for Homeseeker B. The company attributes the Homeseeker B difference to the five feet of net pay encountered.

The evaluator has assigned a 60% chance of development, defined as the chance that development will yield at least the low estimate. That is not a probability of commercial success. Commercial recoverability still depends on the flow test, fluid characteristics, completion decision, development approvals, costs and available funding.

Tweedel gas target remains behind the casing

Zydeco-1 was drilled primarily to reach the Tweedel, and that target remains undrilled. The existing seven-inch casing stops about 380 feet above it, while Gulf Stream says a future deepening program would require roughly 620 feet of new hole. The company has prepared a deepening AFE, but any such work remains subject to engineering review, funding and approvals.

That funding question matters against the company’s recent Zydeco drilling spend, particularly because the current filing does not announce a funded workover or a final completion commitment. The near-term catalyst is therefore narrower than the broader Zydeco story: whether Homeseeker B is completed and flows at rates capable of supporting a reserves assessment.