Key Highlights

  • Equus signed a binding conditional 10-year Gas Sales Agreement with Alcoa for about 50 TJ/day of domestic gas, roughly 182 PJ.
  • The Pre-FEED evaluation estimated a Project NPV10 of US$867 million and a nominal IRR of 31%, with Phase 1 capital near US$1.25 billion.
  • Alcoa accepted the Stage One deliverables and approved Stage Two, releasing US$1.5 million of additional funding for partnering activities.
  • Cash was $11.7 million at 30 September 2026, and the annual general meeting is set for 26 November 2026.

Equus Energy Limited (ASX:EQU) reported on 23 October 2026 that it executed a binding conditional 10-year Gas Sales Agreement with Alcoa of Australia during the quarter ended 30 September 2026, establishing Alcoa as the foundation domestic gas customer for the 100%-owned Equus Gas Project. The agreement provides about 50 TJ/day of domestic gas following project start-up, or approximately 182 PJ over the term, and satisfies the project's domestic gas supply commitment under Western Australia's Domestic Gas Reservation Policy.

Alcoa Agreements and Funding

The sales agreement forms part of a broader Gas Sales and Funding Agreement that gives access to up to US$30 million to support Pre-FEED, FEED and progress toward a Final Investment Decision, subject to stage conditions and Alcoa's internal approvals. In September, Alcoa accepted that the Gate 1 conditions had been achieved and approved the start of Project Partnering funding, releasing US$1.5 million for work on securing operating, LNG offtake, infrastructure and financing partners.

Development Plan and Economics

The preferred plan is a phased tie-back using a leased floating production, storage and offloading vessel, a third-party export pipeline, and existing LNG and domestic gas processing facilities under tolling arrangements. It targets about 2 Mtpa of LNG, 50 TJ/day of domestic gas and peak condensate output near 12,000 barrels per day over a modelled 15-year life. The project is underpinned by independently evaluated 2C Contingent Resources of about 1.7 Tcf of gas and 38 MMbbl of condensate.

The Pre-FEED evaluation estimated a Project NPV10 of US$867 million and a nominal IRR of 31%, with payback about two years after first production. Phase 1 capital expenditure was put at roughly US$1.25 billion in 2026 dollars, including a 20% contingency. The modelled LNG FOB breakeven was about US$6.60/MMBtu against an assumed US$9.50/MMBtu. The analysis is on a 100% project, post-tax, unlevered basis.

Why This Could Matter

Equus said the Alcoa agreement, the economic evaluation and the approval to move to Stage Two strengthened the foundation for discussions with prospective operating, infrastructure, offtake and financing partners. The company said its concept uses existing North West Shelf infrastructure to reach both Western Australia's domestic gas market and LNG export markets.

Where Things Stand

Equus finished the quarter with a signed domestic gas customer, completed Pre-FEED economics and funding released for partnering, with no substantive production activity during the period. Cash stood at $11.7 million, after $1.38 million of exploration and evaluation spending, mainly Pre-FEED work. Grant Davey became Non-Executive Chairman and Michael Barnes an Independent Non-Executive Director on 6 July 2026. After quarter end, variation deeds were agreed with the two executives: each is to receive 3,000,000 Class D Performance Rights, subject to approval at the annual general meeting on 26 November 2026.