Galilee Energy Limited (ASX:GLL) announced on 24 September 2026 that sidetrack operations at its 100%-owned Zydeco Oil & Gas Project in Louisiana are scheduled to commence on 28 September 2026. The program will evaluate five prospective shallow oil zones identified from the original Zydeco-1 well, with the sidetrack designed to preserve the potential for future oil production if drilling, formation evaluation and testing deliver successful results.

The latest update represents a shift in focus towards evaluating oil opportunities within the Zydeco project, alongside the company’s existing gas-condensate objectives. Galilee stated that the sidetrack and oil testing program is fully funded through its recent A$3.5 million placement, with no additional funding currently anticipated for this program.

Zydeco Sidetrack Drilling Moves Forward to Test Five Shallow Oil Targets

The sidetrack program will commence using the drilling rig already located at the Zydeco-1 site. The operation is focused on five shallow oil targets identified from the original well, including Borsum, Richie, Discorbis gravelli, First Het and Homeseeker B.

Galilee designed the sidetrack program to evaluate these targets while maintaining the potential for the well to become an oil production well if commercial Hydrocarbons are identified through drilling and testing activities.

The company stated that the deeper Stafford and Tweedel gas-condensate objectives remain potential targets for a dedicated future well, while the current sidetrack campaign focuses on the shallow oil intervals.

The commencement of drilling follows earlier identification of additional shallow oil potential within the Zydeco-1 well area, creating an opportunity to evaluate an additional hydrocarbon target beyond the original gas-condensate objectives.

Technical Evaluation Will Determine Future Development Pathway

The outcome of the sidetrack program will depend on drilling results, formation evaluation and testing activities.

Galilee has stated that any decision to proceed towards oil production will depend on the results generated from the drilling campaign and subsequent evaluation.

The Zydeco project covers approximately 325.3 acres across multiple leases in Acadia Parish, Louisiana. The company’s technical data indicates that the proposed well location is near the historical MacCabees et al-1 well, which was drilled in 1950 and encountered gas in the Upper Tweedel Sandstone before being completed for production from shallower oil zones.

Galilee plans to undertake extensive wireline logging and evaluation activities to better understand the extent and prospectivity of the targeted zones. Following interpretation of the logging data, the well may be tested and completed for production depending on results.

Zydeco Resource Potential Provides Additional Exploration Opportunity

The Zydeco project contains multiple prospective oil and gas targets across shallow oil zones and deeper gas-condensate formations.

The company’s resource estimates include prospective volumes across the Borsum Sand, Richie Sand, Discorbis gravelli Sand, First Het Sand, Homeseeker B Sand, Upper Tweedel and Lower Tweedel formations. The estimates are based on interpretation of seismic data, historical well information and regional geological analysis.

For the shallow oil targets, Galilee has outlined prospective resource estimates across the five identified zones. The company noted that the estimates are prospective resources and remain subject to exploration and development risks, with drilling required to determine whether commercially recoverable hydrocarbons exist.

The Upper Tweedel and Lower Tweedel formations remain potential future targets, with the company maintaining interest in evaluating both oil and gas-condensate opportunities within the Zydeco project area.

Funding Position Supports Current Zydeco Program

Galilee stated that the sidetrack and oil testing program is fully funded following completion of its recent A$3.5 million placement.

The funding position allows the company to progress the current drilling campaign without requiring additional Capital for the planned sidetrack activities.

The company’s broader strategy is focused on building a scalable US Gulf Coast oil and gas business, beginning with evaluation and potential development of the Zydeco Oil & Gas Project in Louisiana. Galilee also retains a 2% net overriding Royalty over future production from the Glenaras Gas Project in Queensland.

Risks and Uncertainty Factors

The Zydeco sidetrack program remains subject to drilling, technical and commercial uncertainties.

While the identified shallow oil zones provide exploration targets, drilling and testing outcomes will determine whether commercially recoverable hydrocarbons are present.

The company has stated that scheduled activities remain subject to final engineering approval, regulatory requirements and normal operating conditions. There is no assurance that the program will establish a commercially recoverable hydrocarbon accumulation.

Future development decisions will depend on technical results, production testing outcomes, economic assessments and potential operational requirements.

Commodity price movements, development costs and market conditions may also influence future commercial decisions associated with any potential production pathway.

What to Watch Ahead

Investors may continue monitoring progress of the Zydeco sidetrack drilling campaign and results from the evaluation of the five shallow oil targets.

Key areas of focus include:

  • Commencement and progress of sidetrack drilling operations.
  • Results from formation evaluation and testing activities.
  • Assessment of potential oil production pathways.
  • Future evaluation of deeper Stafford and Tweedel gas-condensate targets.
  • Updates regarding the broader Zydeco Oil & Gas Project development strategy.

Galilee Energy’s latest update marks an important operational step for the Zydeco project as the company evaluates shallow oil opportunities identified from the original well. The outcome of the sidetrack program will determine the next stage of technical and development planning for the Louisiana asset.