Highlights

  • Binding conditional 10-year Gas Sales Agreement signed with Alcoa for about 50 TJ/day.
  • Pre-FEED evaluation estimated a project NPV10 of US$867 million and IRR of 31%.
  • Alcoa approved Stage Two – Project Partnering, releasing US$1.5 million in funding.
  • Grant Davey appointed Non-Executive Chairman and Michael Barnes as a director.

Equus Energy Limited (ASX:EQU) has released its quarterly activities report for the period ended 30 September 2026. During the quarter, the company advanced commercial and partnering work on its 100%-owned Equus Gas Project, located offshore Western Australia. The project is underpinned by independently evaluated 2C Contingent Resources of about 1.7 Tcf of gas and 38 MMbbl of condensate, with a development concept that uses existing North West Shelf infrastructure.

Alcoa Gas Sales and Funding Agreements

Equus executed a binding conditional 10-year Gas Sales Agreement with Alcoa of Australia, establishing Alcoa as the project’s foundation domestic gas customer. The agreement provides for about 50 TJ/day of domestic gas following project start-up, equivalent to about 182 PJ over the term, and satisfies the project’s commitment under Western Australia’s Domestic Gas Reservation Policy.

The agreement forms part of a broader Gas Sales and Funding Agreement providing access to up to US$30 million to support Pre-FEED, FEED and progress towards a Final Investment Decision, subject to stage conditions and Alcoa approvals. In September, Alcoa accepted the Stage One Pre-FEED deliverables and approved Stage Two – Project Partnering, releasing US$1.5 million to support efforts to secure operating, LNG offtake, infrastructure and financing partners.

Development Plan and Economics

The preferred development plan involves a phased tie-back using a leased floating production, storage and offloading vessel, a third-party export pipeline and existing processing facilities under tolling arrangements, with pathways assessed via Woodside’s Pluto facilities or Santos’ Varanus Island infrastructure. It targets about 2 Mtpa of LNG, 50 TJ/day of domestic gas and peak condensate production of about 12,000 barrels per day over a modelled 15-year life.

The Pre-FEED evaluation estimated a project NPV10 of US$867 million and a nominal IRR of 31%, with capital payback about two years after first production. Phase 1 capital expenditure was estimated at about US$1.25 billion in 2026 dollars, including a 20% contingency. The modelled LNG breakeven price was about US$6.60/MMBtu, compared with an assumed price of US$9.50/MMBtu.

Board Changes and Financial Position

On 6 July 2026, Equus appointed Grant Davey as Non-Executive Chairman and Michael Barnes, a former Western Australian Under Treasurer, as an Independent Non-Executive Director. Brendan Jesser retired as Chairman and Chris Bath retired as Executive Director, continuing as CFO and Company Secretary.

Equus held $11.7 million in cash at 30 September 2026, after spending $1.38 million on exploration and evaluation, mainly Pre-FEED work. After the quarter, it received about $865,000 from Alcoa for Stage Two funding costs. The company’s AGM will be held on 26 November 2026, where shareholders will vote on additional performance rights for its executives.

Key Takeaways

Equus made significant commercial progress during the quarter, securing a foundation domestic gas customer and publishing Pre-FEED economics for its project. The Alcoa agreement remains conditional, and the project still requires operating, offtake and financing partners before a final investment decision. Progress in the partnering phase will be the key development to watch.