H3 Energy Limited (ASX:H3E), an ASX-listed exploration and production company focused on exploring and delivering hydrocarbons, natural hydrogen and helium for the energy transition, has received a boost from a recent report highlighting potential gas shortages in Western Australia. The Australian Energy Market Operator (AEMO) forecasts a significant supply gap emerging in the WA domestic gas market from 2028, widening further from 2030 onwards, potentially causing severe consequences for the local economy. This forecast, detailed in AEMO’s 2025 Western Australia Gas Statement of Opportunities, strengthens the economic importance of H3 Energy’s Warro gas asset.
The Warro gas field, independently assessed with a mid-case Gas Initially In Place (GIIP) of 3.2 Tcf, is considered one of the largest undeveloped and mature gas resources in Western Australia’s onshore region. Its proximity, just 30km, to the Dampier-to-Bunbury Natural Gas Pipeline gives it a critical location advantage for rapid tie-in and delivery into Western Australia’s tightening domestic gas market. Previous operators invested over $100 million in seismic and drilling, confirming a large gas resource with test flows, despite challenges of high water cut.
H3 Energy has been working to understand the reservoir’s fluid dynamics to limit water production, which was previously thought to make the field uneconomic. CEO Nik Sykiotis noted that the AEMO report highlights the potential significance of the Warro gas field to the State’s economy. With new technical analysis aimed at solving the water cut issues, coupled with potentially higher gas prices, the economic prospectivity of the asset has significantly improved.
The company will now focus its attention on engineering solutions, while RISC completes its commerciality study, to quantify the economic flow rate required. H3 Energy believes that with modern interpretation, renewed regulatory support for fracture stimulation, and a targeted completion strategy, Warro can be transformed into a producing, high-value onshore gas asset, helping to alleviate the anticipated supply shortage.
