Key Highlights

  • Net working interest production averaged 64 barrels of oil equivalent a day, compared with 65 in the June quarter, and net revenue was A$490,588 versus A$581,780.
  • Cash was about A$196,000, and the company has drawn A$150,000 of a A$250,000 unsecured loan from a company controlled by its chief executive, due 31 December 2026.
  • Estimated funding runway is 2.0 quarters, and directors' fees and management salaries are being deferred.

Production and revenue

Winchester Energy (ASX:WEL) released its quarterly report for the three months to 30 September 2026 on 28 October. The company said net working interest production averaged 64 barrels of oil equivalent a day, compared with 65 barrels a day in the June quarter. Working interest net revenue after royalties was A$490,588 (US$342,283), down from A$581,780 in the previous quarter.

The company reported that the average oil price it received fell to US$83.36 per barrel from US$97.83 in the June quarter. The lower realised price is consistent with the fall in quarterly revenue, which declined by more than the small change in volumes would suggest. The report notes that the company holds 2,639 acres of leases.

One point in the report does not fully reconcile. The company states production of 64 barrels a day, but the working interest volume it gives of 5,753 barrels of oil equivalent over 92 days works out to about 62.5 barrels a day. The difference is small, but readers should treat the headline daily rate with some care.

Operations in Texas

At the Varn waterflood in Taylor County, the company said water injection is complete and it is now monitoring the effect on production. It did not report a production result from the waterflood in this document, so any benefit remains to be demonstrated.

In Nolan County, the company reported an unscheduled pump replacement at the 2003 well, which it said had been completed. Winchester said the well is back online and producing as expected. The report describes the replacement as unscheduled, which would be expected to have affected volumes for part of the period.

Cash, funding and the director loan

Cash at 30 September 2026 was about A$196,000 (US$137,000). Operating cash flow for the quarter was a positive US$78,000, while US$181,000 was spent on exploration and oil and gas activities, according to the report.

The company has drawn A$150,000 of a A$250,000 unsecured loan facility from Petra Cotes Pty Ltd, a company controlled by chief executive Rory McGoldrick. The loan and interest are due on 31 December 2026. Directors' fees and management salaries are being deferred and are accruing until operating cash flows can support payment. Winchester estimated its funding runway at 2.0 quarters, based on cash plus unused facilities.

Those details indicate that the company is relying in part on related-party funding and deferred remuneration to support its activities. The report does not set out how the loan will be repaid or extended if it falls due before operating cash flow improves, and no new capital raising is described in the document.

Auditor change and capital structure

The company also reported that its auditor has changed to Moore Australia Audit (WA) after Hall Chadwick resigned. Ratification of the appointment is due at the next annual general meeting. Winchester has 1,713,018,946 shares on issue.

What to watch

The next items flagged in the report are the effect of water injection on Varn production, the repayment of the Petra Cotes loan by 31 December 2026 and the ratification of the new auditor at the next AGM. The company did not give production or revenue guidance in this report.