Pancontinental Energy NL (ASX:PCL) released its June 2026 Quarterly Activities Report on 14 July 2026, providing updates on both its PEL 87 farm-in process and the rapidly advancing offshore Namibia Orange Basin exploration campaign by major companies in adjacent blocks. MIME (Namibia's Ministry of Industry, Mines and Energy) has confirmed the Draft Deed of Amendment to the PEL 87 Petroleum Agreement is acceptable, with the parties progressing to signing. A seismic reprocessing feasibility study is underway as a condition of the 12-month PEL 87 extension. The company retained cash of $2.4 million at quarter end.

PEL 87 Farm-In Progress

MIME confirmed the Draft Deed of Amendment to the PEL 87 Petroleum Agreement as submitted by Pancontinental is acceptable, and the parties are progressing to signing. One condition of the approval is the reprocessing of the 3D seismic data covering PEL 87. Pancontinental is progressing a seismic reprocessing feasibility study to determine the most efficient approach, comparing post-stack versus pre-stack techniques. Qualified processing groups have been requested to submit proposals, including test-processing of a small sub-volume of the 3D data. A number of groups continue to progress the PEL 87 farm-in opportunity, with technical and commercial Due Diligence ongoing. The company cannot provide details on the identity or number of interested parties due to the confidential nature of discussions.

Namibian Orange Basin Activity

Major companies are actively drilling in the offshore Namibian Orange Basin, proximal to Pancontinental's position. Shell completed drilling of the Merlin-1X exploration well in PEL 39, resulting in a light oil discovery with associated gas within the Upper Cretaceous Coniacian sequence. Shell described it as delivering the most promising subsurface results to date in that licence, with good reservoir quality, light oil, and limited associated gas. The well was sidetracked to acquire additional appraisal data. In PEL 85 to the south, the Rhino Resources/Azule Energy JV drilled the Capricornus-1A appraisal well, encountering 46 metres of gross hydrocarbon pay in pressure communication with the original Capricornus-1X discovery, confirming reservoir continuity. PEL 85 is planning an extensive 8,633 km² 3D seismic campaign across the entire block. GalpEnergies continues preparing to drill three wells at the Mopane discovery complex in H2 CY2026.

About the Company

Pancontinental Energy NL is an ASX-listed oil and gas exploration company with its primary asset being PEL 87 in offshore Namibia's Orange Basin. The company's strategy is to farm down PEL 87 to a well-capitalised partner that will fund and operate the required exploration well, allowing Pancontinental to participate in a potential Orange Basin discovery with reduced Capital exposure.

Risks

The PEL 87 farm-in has been in process for an extended period. While parties are completing due diligence, no binding farm-in agreement has been announced. The confidentiality requirement prevents investors from assessing how advanced negotiations are.

Cash of $2.4 million is limited for a company needing to fund a seismic reprocessing feasibility study, exploration well coordination, and ongoing corporate costs while awaiting farm-in completion.

The seismic reprocessing is a condition of the MIME extension and must be addressed — this represents a capital and timeline commitment before exploration activity can begin.

PEL 87's exploration well is the primary committed work programme item. Without a farm-in partner, Pancontinental cannot fund this well itself and would need to seek regulatory accommodation.

PEL 87 is in the frontier portion of the Namibian Orange Basin, further from the recent Shell and GalpEnergies discoveries in the southern Orange Basin. Geological risk may be higher than in blocks closer to proven discoveries.

What to Watch Ahead

Signing of the Deed of Amendment to the PEL 87 Petroleum Agreement with MIME — the final administrative step to formalise the 12-month extension.

Announcement of a binding farm-in agreement for PEL 87 — the primary commercial milestone for Pancontinental.

Completion of the seismic reprocessing feasibility study and selection of the most efficient reprocessing approach — this condition must be addressed to maintain good standing with MIME.

GalpEnergies' three-well Mopane drilling programme in H2 CY2026 — additional discoveries in this part of the Orange Basin would increase regional confidence and potentially accelerate farm-in discussions for PEL 87.

Further appraisal results from Shell's Merlin-1X (post sidetrack) and the Capricornus appraisal programme, which will refine understanding of the Orange Basin's resource potential relevant to PEL 87.