Metgasco Limited (ASX:MEL) provided its quarterly activities report for the period ended 30 June 2026, highlighting progress across its Odin and Vali gas fields, government-supported appraisal drilling plans and ongoing corporate initiatives aimed at strengthening the company’s position. During the quarter, the company’s joint venture received funding agreements with the South Australian Government for A$5 million in grants to support drilling of the Odin-3 and Vali-4 gas appraisal wells.

Metgasco also continued discussions regarding potential farm-in opportunities, asset acquisitions and other corporate opportunities as part of its broader strategy to recapitalise the company. The company reported quarterly sales Revenue of A$292,450 and production of 0.025 Petajoule equivalent (PJe), reflecting lower output compared with the previous quarter.

Odin and Vali Appraisal Drilling Gains Government Support

A key development during the quarter was the completion of grant agreements with the South Australian Government to provide cornerstone funding for future drilling activities.

The grants provide A$2.5 million each to the PRL 211 and ATP 2021 joint ventures, supporting drilling of the Odin-3 and Vali-4 gas appraisal wells. Metgasco’s share of the total A$5 million grant is 25%, resulting in approximately A$1.25 million of restricted cash recognised at quarter end.

The funding is intended to support appraisal drilling activities designed to further evaluate gas resources within the Odin and Vali fields.

Timing of the drilling program remains subject to joint venture approvals, rig availability and finalisation of the FY27 activity schedule.

Odin Gas Field Continues Production Operations

The Odin gas field, located across the South Australian and Queensland border within PRL 211 and ATP 2021, continued production activities during the quarter.

Odin was discovered in 2021 and commenced appraisal production from Odin-1 in September 2023. The field was subsequently expanded through Odin-2, which successfully appraised the north-eastern section of the field and was connected in October 2024.

During the June 2026 quarter, Odin-1 produced for 83.2 days and Odin-2 produced for 72 days. Average daily metered raw gas production for the days online was 1.29 million standard cubic feet per day (MMscfd), compared with 1.48 MMscfd in the previous quarter.

The Odin wells continue supplying gas to Pelican Point Power, a Subsidiary of ENGIE Australia, under a gas Supply agreement extending to December 2026.

Vali Gas Field Maintains Production While Future Activity Progresses

The Vali gas field, located in Queensland adjacent to the South Australian border, continued production appraisal activities during the quarter.

Vali-1 produced for 65.3 days during the period, flowing from the Patchawarra Formation. The company reported that downtime was mainly associated with well cycling related to Downstream infrastructure operations outside Vintage’s control.

The Vali Facility recorded 100% availability during the quarter, while average raw gas production for online days was 0.40 MMscfd compared with 0.39 MMscfd in the previous quarter.

Operations at Vali-2 and Vali-3 remained delayed due to ongoing wet weather conditions affecting road access. Planned surfactant injection at Vali-3 to support dewatering and increase gas flow could not proceed until access is restored.

Production and Revenue Performance Reflect Lower Quarterly Output

Metgasco recorded quarterly sales revenue of A$292,450, representing a 20% decrease compared with the March 2026 quarter.

The decline was primarily attributed to lower gas production during the period. Sales gas Volume declined to 21.35 terajoules from 27.4 terajoules in the previous quarter.

Quarterly production decreased to 0.025 PJe from 0.03 PJe in the previous quarter, representing a 17% reduction. Sales gas accounted for approximately 90% of total production during the quarter.

For FY26, Metgasco recorded sales revenue of A$1.503 million compared with A$2.330 million in FY25, while production declined to 0.12 PJe from 0.195 PJe.

Corporate Activities Focus on Recapitalisation and Funding Options

Metgasco continued evaluating potential corporate opportunities during the quarter, including farm-in discussions, Acquisition opportunities and other initiatives aimed at recapitalising the company.

The company entered into a A$500,000 bridging Loan facility with Glennon Small Companies at an Interest Rate of 10% during May 2026. The repayment date for Glennon Small Companies loans was subsequently extended to 30 December 2026, with other terms unchanged.

Metgasco also repaid a previously interest-free loan from Vintage relating to December 2025 and January-February 2026 ATP2021 and PRL211 cash calls, totalling A$255,000, following termination of the Petroleum Title Sales Agreement.

At quarter end, Metgasco reported total cash and cash equivalents of A$1.616 million, including A$1.25 million of restricted grant funds reserved for Odin-3 and Vali-4 drilling activities. Available operating cash was A$366,000.

Risks and Uncertainty Factors

Metgasco’s future progress remains dependent on successful execution of appraisal drilling programs, funding arrangements and joint venture approvals.

The Odin-3 and Vali-4 drilling programs require further approvals, rig availability and completion of joint venture planning before activities can commence.

The company’s financial position remains an important consideration, with Metgasco actively reviewing funding and corporate opportunities. The company noted that continued operations depend on additional funding, including recovery of amounts owed or alternative Capital raising initiatives.

Gas production outcomes also remain dependent on field performance, infrastructure availability and operational conditions affecting Odin and Vali.

What to Watch Ahead

Investors may continue monitoring Metgasco’s progress across its gas Assets and corporate initiatives.

Key areas of focus include:

  • Finalisation of Odin-3 and Vali-4 drilling schedules.
  • Progress of appraisal drilling activities supported by South Australian Government grants.
  • Production performance from Odin and Vali fields.
  • Potential farm-in, acquisition or recapitalisation opportunities.
  • Funding arrangements and corporate developments.

Metgasco’s latest quarterly update highlights continued production from its Cooper Basin gas assets while advancing plans for further appraisal drilling at Odin and Vali. The company remains focused on improving production potential, securing funding pathways and progressing future development activities.