Key Highlights

  • The Zydeco-1 sidetrack now targets five shallow oil zones with gross prospective resources of 264.1 kbbl (1U), 317.0 kbbl (2U), 334.6 kbbl (mean) and 422.6 kbbl (3U).
  • The deeper Stafford and Tweedel gas-condensate targets are deferred to a separate future well.
  • The revised program is funded from the recently announced A$3.5 million placement.
  • Estimates are unrisked, relate to undiscovered accumulations and carry risks of discovery and development.

Galilee Energy Limited (ASX:GLL) announced on 21 September 2026 that the planned Zydeco-1 sidetrack at its 100%-owned Zydeco Oil & Gas Project in Louisiana has been redesigned around five shallow oil zones identified from original well data. The sidetrack is now designed as a potential oil production well. The original primary objective was the Upper and Lower Tweedel gas-condensate targets, which will be tested by a dedicated future well.

Five Oil Zones and Resource Estimates

The zones are Borsum, Richie, Discorbis gravelli, First Het and Homeseeker B, quantified using logging-while-drilling data, integrated seismic and offset-well interpretation. On a gross basis before royalties, the 3U estimates are 86.6 kbbl for Borsum, 28.8 kbbl for Richie, 102.4 kbbl for Discorbis gravelli, 64.0 kbbl for First Het and 140.8 kbbl for Homeseeker B, the largest single zone. After royalties, the aggregate is 184.9 kbbl (1U), 221.9 kbbl (2U), 234.2 kbbl (mean) and 295.8 kbbl (3U). Totals are arithmetic sums and are unrisked. The volumes are undiscovered, and drilling is required to determine whether commercial quantities of movable Hydrocarbons exist.

Why Oil Takes Priority

Galilee states that prevailing oil Economics are materially more favourable than those for natural gas, and that oil could offer a more direct route to near-term Cash Flow if testing confirms movable hydrocarbons and deliverability. The release includes EIA data showing a latest WTI price of US$107.02 per barrel and Henry Hub gas at US$2.97 per MMBtu, and notes that benchmark prices are not project realised prices. The company said oil and gas require different completion configurations, and combining them in one bore would complicate optimisation of the shallow oil zones.

Deferred Gas-Condensate Targets

Upper and Lower Tweedel retain previously reported gross unrisked 3U prospective resources of up to 13.7 Bcf of gas and 610,000 barrels of condensate. Stafford recorded gas readings across its full interval that exceeded the 5,000-unit upper detection limit of the rig gas detector, but no prospective resource is attributed to it. The company describes the deferral as a sequencing decision. The original wellbore reached a measured depth of 9,393 feet before drilling was interrupted by a mechanical issue in the open-hole section.

Funding, Interests and Next Steps

The sidetrack and testing program is expected to be funded from the A$3.5 million placement, with no additional funding currently anticipated for it. Galilee holds a 100% working interest and a 70% net Revenue interest in the 325.3-acre project in Acadia Parish. Next steps include finalising the trajectory, casing and completion design, the formation evaluation and testing program, and contractor arrangements. Commencement remains subject to final engineering approval, contractor availability and regulatory requirements. The company also has a binding agreement to sell the Glenaras Gas Project in Queensland, subject to completion conditions, and would retain a 2% net overriding royalty.

Key Insights

Galilee has changed the Zydeco-1 sidetrack objective from gas-condensate to five shallow oil zones with a gross 3U prospective resource of 422.6 kbbl, deferring Tweedel and Stafford to a future well. The estimates are unrisked and undiscovered, the original wellbore was interrupted by a mechanical issue, and the sidetrack still requires final engineering approval and a contractor. Funding comes from a A$3.5 million placement.