Key Highlights

  • Wireline logs from the Zydeco-1 sidetrack indicated net oil pay in two zones, Homeseeker B and the Borsum Sand, though neither has been flow tested.
  • Maiden contingent resources were released on 27 October 2026, classified under SPE-PRMS 2018 as Development Unclarified and not risked for the chance of development.
  • The company raised A$3.5 million before costs at A$0.0045 per share and completed the sale of Galilee Resources Pty Ltd during the quarter.

Gulf Stream Energy Limited (ASX:GSE), formerly Galilee Energy, said in its quarterly activities report for the period to 30 September 2026 that wireline logs from the Zydeco-1 sidetrack in Louisiana indicated net oil pay in two zones, and that an independent evaluation has produced maiden contingent resources for both. The company stressed that neither zone has been flow tested and no fluids have been recovered.

Zydeco-1 drilling and the oil zones

The company holds a 100 per cent working interest, with a 70 per cent net revenue interest, in about 325.3 acres of leases in Acadia Parish. Zydeco-1 was spudded on 2 July 2026. The original hole became stuck at 9,393 feet measured depth, so the company drilled a sidetrack, redesigning that programme in September to prioritise oil. The sidetrack reached 9,180 feet measured depth, and SLB ran wireline logs on 8 October 2026.

On 15 October the company announced two discoveries on log evidence. Homeseeker B showed five feet of net oil pay between 8,935 and 8,978 feet true vertical depth, with porosity of 24 per cent and water saturation of 49 per cent. The shallower Borsum Sand showed 12 feet of net pay between 3,364 and 3,472 feet, with porosity of 32 per cent and water saturation of 43 per cent. No health, safety or environmental incidents were reported.

Maiden contingent resources

On 27 October 2026 the company released contingent resource estimates with an effective date of 19 October. For Borsum Sand, gross volumes are 36,000, 48,000 and 60,000 barrels in the low, best and high cases, or 25,200, 33,600 and 42,000 barrels net to the company. For Homeseeker B, gross volumes are 30,000, 40,000 and 50,000 barrels, or 21,000, 28,000 and 35,000 barrels net.

These are contingent resources, not reserves. They are deterministic, classified under the SPE-PRMS 2018 framework, and the company said they are not risked for the chance of development. The draft classification is "Development Unclarified". The method multiplied area, net pay and recovery factors of 300, 400 and 500 barrels per acre-foot, using 10 acres for Borsum and 20 acres for Homeseeker B. Nearby offset wells were cited as support, although the report says they do not predict Zydeco-1 performance. The key contingencies are the absence of flow testing or fluid samples and of an approved development plan or completion decision. The evaluator was an external consultant from Canyon Creek Energy.

Next steps

The priority is to complete and flow test Homeseeker B from the existing cased wellbore. A completion authority for expenditure has been prepared and the board expects to decide shortly. Borsum Sand could be completed later as a second, shallow zone. The deeper Upper Tweedle gas-condensate target is undrilled and no hydrocarbons have been found there; casing is set about 378 feet above it, and a deepening proposal covering roughly 620 feet of new hole is prepared but subject to engineering review, regulatory approval and board approval.

Corporate and funding

The company said the sale of Galilee Resources Pty Ltd, which held the Glenaras tenement ATP 2019, to Novus Energy Production Company completed in the quarter under a binding agreement signed on 3 August 2026. Gulf Stream keeps a 2 per cent net overriding royalty, and the buyer is to receive about A$1.34 million of security deposit reimbursements and A$500,000 of deferred consideration on a financing milestone.

It also raised A$3.5 million before costs at A$0.0045 per share, with one free option per share exercisable at A$0.011 by 20 February 2029. About A$2.56 million of the raise required shareholder approval, which was obtained on 29 September 2026. Exploration spending in the quarter was A$2.675 million, mainly on Zydeco-1, and there was no production. The company changed its name and its ASX code from GLL to GSE, and had 2,019,057,169 ordinary shares on issue.