Metgasco Limited (ASX: MEL) Launches Capital Raise to Fund Cooper Basin Gas Growth Strategy

Aditi Sarkar

10 November 2026 06:36 PM AEDT

Metgasco Limited (ASX: MEL) Launches Capital Raise to Fund Cooper Basin Gas Growth Strategy

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Highlights

• Metgasco (ASX: MEL) is undertaking a renounceable 5-for-1 entitlement offer at 1.1 cents per share, aiming to raise approximately $2.02 million.

• Each new share issued carries one free attaching option exercisable at 1.7 cents for three years, providing upside leverage.

• Funds will be used for Balance Sheet reset, the permanent Odin field connection (reducing field costs), and Working Capital for new asset discussions.

• The company holds 37.65 PJe of net gas resources across the Odin and Vali fields in the Cooper Basin, with plant capacity at approximately 13 times current production.

Metgasco Limited (ASX:MEL), an ASX-listed oil and gas producer operating in the Cooper Basin, has announced a renounceable entitlement offer to raise approximately $2.02 million. The offer is priced at 1.1 cents per share on a 5-for-1 basis, with each new share accompanied by one free attaching option exercisable at 1.7 cents for three years from the date of issue. The capital raise is designed to reset Metgasco's balance sheet, fund the permanent connection at the Odin gas field, and position the company for new asset acquisitions as it seeks to build a larger Australian onshore gas and oil business.

Cooper Basin Assets and Production Profile

Metgasco holds a 25% non-operated interest in both the Odin and Vali gas fields in the Cooper Basin, located in Queensland and South Australia. The fields are connected to Moomba via the Vali-Beckler pipeline and Supply gas to customers including AGL and ENGIE's Pelican Point facility. An independent reserves assessment by CDRI as at 30 June 2026 attributed 6.2 PJe of 2P reserves and 31.45 PJe of 2C contingent resources to Metgasco's net share, for a combined 37.65 PJe. The existing processing plant has capacity that significantly exceeds current production, providing meaningful headroom for growth through additional well deliveries.

Two new grant-funded wells — Odin-3 and Vali-4 — are targeted for delivery before September 2028, with South Australian Government grants covering a portion of the drilling costs. These wells are designed to lift production and convert contingent resources into reserves, enabling a more comprehensive field development plan. The company has already set aside its share of the government grants for this purpose.

East Coast Gas Market Context

Metgasco's strategy is underpinned by the structural tightening of Australia's east coast gas market. Industry forecasts point to supply gaps emerging in the southern states from around 2028–2030, with contracted gas prices on the east coast reflecting this tightening dynamic. In addition, Australia's exposure to global oil price movements has increased given the country's reliance on imported petroleum. The combination of a structurally undersupplied gas market and elevated oil prices creates an attractive operating environment for a producing gas company with untapped oil exploration potential on its licences.

Use of Funds and Strategic Direction

The proceeds from the entitlement offer are allocated across Debt reduction through the conversion of a lender's debt into equity, funding the permanent Odin connection (which is expected to materially reduce annual field rental costs for the joint venture), and working capital and corporate expenses. The company is also in discussions with other parties regarding the Acquisition of new oil and gas assets, with oil exploration in ATP 2021 identified as a near-term priority. Metgasco has maintained a lean corporate cost structure and reduced director remuneration from early 2026 as part of its operational discipline strategy.

Key Insights

Metgasco's capital raise is structured to minimise immediate dilution by linking the offer to free attaching options, giving existing shareholders participation in future upside.

The structural east coast gas shortage anticipated from 2028–2030 provides a favourable long-term Demand backdrop for Metgasco's Cooper Basin production assets.

Completion of the permanent Odin connection would meaningfully reduce annual field operating costs for the joint venture, improving the Economics of existing production.

The company's discussions around new asset acquisitions, while non-binding, indicate a clear strategic intent to grow beyond the existing two-field portfolio.

FAQs

Q: What is Metgasco's entitlement offer?

A: Metgasco is offering shares to existing shareholders on a 5-for-1 basis at 1.1 cents per share, with one free attaching option for every new share issued, aiming to raise approximately $2.02 million.

Q: What are the Odin and Vali gas fields?

A: The Odin and Vali gas fields are Cooper Basin assets in Queensland and South Australia in which Metgasco holds a 25% non-operated interest. They produce natural gas connected to the Moomba hub.

Q: What will the capital raised be used for?

A: Funds will be used to reduce lender debt, fund the permanent Odin field connection, cover working capital and corporate costs, and support the planning of new well deliveries.

Q: What is the significance of the east coast gas market to Metgasco?

A: Industry forecasts point to a structural gas supply gap in Australia's southern states from around 2028–2030, which is expected to support higher contracted gas prices and demand for domestic producers.

Q: What is the free attaching option and how does it work?

A: Each new share issued under the entitlement offer comes with one free option exercisable at 1.7 cents for three years from issue. If exercised, the options would provide additional cash to the company and result in further share issuance.

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