Metgasco Ltd (ASX:MEL), an Australian oil and gas explorer and producer with interests in gas fields in the Cooper/Eromanga Basins, has released its Quarterly Activities Report for the period ended 30 September 2026. The report detailed a decrease in quarterly sales revenue and production, alongside a significant reclassification of its gas reserves and ongoing strategic discussions to recapitalise the company. Sales revenue for the quarter reached $260,750, an 11% drop from the prior quarter, primarily due to lower gas production which also saw a 20% decline to 0.02 PJe.
Operationally, the Odin Field recorded average online gross raw gas production of 1.07 MMscfd, while the Vali Field averaged 0.36 MMscfd. Production was impacted by flow and buildup cycling, maintenance activities at Odin, and persistent wet weather delaying operations at Vali-2 and Vali-3. Subsequent to the quarter, an independent assessment of the Vali and Odin reserves as at 30 June 2026 was completed. This assessment confirmed unchanged gas-in-place volumes but led to a material reclassification of reserves, moving gas previously classified as Proved and Probable (2P) Reserves to 2C Contingent Resources due to current capital expenditure plans. As a result, Metgasco’s net 2C Contingent Resources now stand at 31.45 PJe, while net 2P Reserves were reduced to 6.2 PJe from 36.45 PJe 12 months prior. Metgasco MD Ken Aitken highlighted active discussions for farm-in and asset acquisition opportunities and noted the company is working with the joint venture to finalise the FY27 well activity schedule to increase production, assisted by a South Australian Government grant to co-fund the drilling of Odin-3 and Vali-4 development wells.
In corporate news, Metgasco remains in active discussions regarding potential farm-in or acquisition of new oil and gas assets and other corporate opportunities aimed at recapitalising the company. The company’s loans with Glennon Small Companies Ltd were extended to 30 December 2026, with total outstanding debt, including capitalised interest, amounting to $7.3 million as of 30 September 2026. Metgasco concluded the quarter with $169,000 in available cash for operating use, alongside $1.25 million in restricted funds from the SA Government grant, bringing total cash and cash equivalents to $1.419 million. Based on current expenditure, the company has an estimated 0.88 quarters of funding available for future operating activities, excluding the restricted funds. The company anticipates similar levels of net operating cash flows for the near term, excluding the one-off grant funding, and is actively exploring capital raising options to meet its business objectives.
