Why Equus Energy (ASX:EQU) Reported a Conditional Alcoa Gas Deal and US$1.5 Million Funding Release

Sonal Goyal

23 October 2026 05:42 PM AEDT

Why Equus Energy (ASX:EQU) Reported a Conditional Alcoa Gas Deal and US$1.5 Million Funding Release

Image Source: Shutterstock

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

Key Highlights

Equus Energy reported a binding conditional 10-year gas sales agreement with Alcoa for about 50 terajoules a day from start-up.
Alcoa approved Stage Two funding in September, releasing US$1.5 million under a funding agreement providing up to US$30 million.
Cash at 30 September 2026 was A$11.7 million, down from A$13.4 million, with an estimated 6.3 quarters of funding.

Equus Energy (ASX:EQU) has released its quarterly activities report for the period ended 30 September 2026, reporting a binding conditional 10-year gas sales agreement (GSA) with Alcoa for the Equus Gas Project off Western Australia. The company described Alcoa as the project's foundation domestic gas customer, with Supply of about 50 terajoules a day from start-up, or roughly 182 petajoules over the term. The company said the GSA meets the project's domestic gas supply commitment under the state's Domestic Gas Reservation Policy.

The GSA forms part of a broader Gas Sales and Funding Agreement that provides up to US$30 million for pre-front-end engineering design (Pre-FEED), front-end engineering design (FEED) and progress towards a final Investment decision. Access to that funding is conditional, subject to stage requirements and Alcoa's internal approvals.

In September, Alcoa accepted that Gate 1 conditions had been met and approved Stage Two (T2) funding for project partnering, releasing US$1.5 million. Equus said the funds support securing operating, LNG offtake, infrastructure and financing partners. It invoiced US$605,720 (about A$865,310) for the September quarter, received on 7 October 2026, and invoiced a further US$505,155 (about A$721,650) for the quarter to 31 December 2026.

Resources and development concept

Equus owns 100 per cent of the project, which holds 2C contingent resources of about 1.7 trillion cubic feet of gas and 38 million barrels of condensate. These are contingent resources, reported under SPE-PRMS 2018 from an independent report with an effective date of 14 October 2025 and classed as development unclarified, not reserves.

The company's development plan is a phased tie-back using a leased floating production storage and offloading vessel, a third-party export pipeline and existing LNG and domestic gas processing under tolling arrangements. It assessed routes via the Woodside-operated Pluto facilities and the Santos-operated Varanus Island infrastructure. Its modelled outputs are about 2 million tonnes a year of LNG, about 50 terajoules a day of domestic gas and peak condensate of about 12,000 barrels a day over a 15-year life.

On the company's modelling, the 100 per cent project has a post-tax, unlevered net present value at 10 per cent of US$867 million at 1 January 2027 and a nominal internal rate of return of 31 per cent. It estimates payback of about two years after first production and an LNG breakeven of about US$6.60 per million British thermal units, against an assumed LNG price of US$9.50. Phase 1 Capital cost is about US$1.25 billion in real 2026 dollars including 20 per cent contingency, excluding the leased vessel and pipeline, whose charges sit in operating costs.

Cash position and corporate matters

Cash at 30 September 2026 was A$11.7 million, down from A$13.4 million. Operating cash outflow was A$1.865 million, and exploration and evaluation spend was A$1.38 million, mainly Pre-FEED work. Equus Energy (ASX:EQU) reported an estimated 6.3 quarters of funding.

The board was reconstituted in the quarter: Grant Davey became non-executive chairman and Michael Barnes an independent non-executive director on 6 July 2026, with Brendan Jesser retiring as chairman and Chris Bath stepping down as executive director while remaining chief financial officer and company secretary. After quarter end, variation deeds were agreed with executives Will Barker and Andrew Leibovitch, each to receive 3,000,000 Class D performance rights, subject to Shareholder approval under Listing Rule 10.14. The rights vest on the earlier of an announced final investment decision or a 90-day volume-weighted average price of at least A$0.80, and expire five years after issue.

Permits and next milestones

The project sits across permits WA-390-P, WA-474-P and WA-70-R, the last of which has a renewal application lodged and under assessment. The Annual General Meeting is set for 9am on Thursday 26 November 2026, with the notice of meeting due to be despatched in the week beginning 26 October 2026.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.