On 8 October 2026, Echelon Resources (ASX:ECH) announced that the Palm Valley 14 (PV-14) appraisal well is being completed as a gas producer and will be tied into the Palm Valley Production Station. The announcement set out drilling, flow test and timing details for the well in Northern Territory Operating Lease 3.

Drilling results and gas flows

PV-14 reached a total depth of 2,942 metres measured depth on 14 September 2026. It was drilled at a deviated angle of up to 75 degrees toward the northern flank of the Palm Valley gas field and targeted gas-bearing intervals and fractures within the Pacoota P1 Formation. The well intersected gas flows over approximately 837 metres along the deviated wellbore.

Drilling was extended to isolate formation water ingress in the toe of the well using open hole packers. After some initial running issues, two packers were set, and flow testing indicated shut-off.

The open hole flow test

An open hole flow test from 2,102.5 to 2,729 metres measured depth (1,904 to 2,041 metres true vertical depth) was run through a three-quarter-inch choke over 90 minutes. Gas rates of approximately 3 million standard cubic feet per day (100% joint venture) were measured, with no water or oil recorded.

The rate had not stabilised and was still increasing slowly at a flowing tubing head pressure of 210 psi at the end of the test. Trace water was detected afterwards during completion operations, which the company inferred to be clean-up of water produced during underbalanced shut-off operations rather than water from behind the packers.

Tie-in, first gas and sales

First gas is expected before the end of October 2026. Echelon said current estimates for a tied-in rate from the well are 3 to 4 terajoules per day, with updated flow data to be determined after production starts and clean-up continues. Gas will be sold into the Northern Territory market under a gas Supply agreement negotiated with the Northern Territory Government in April 2026.

The Ensign 974 rig will complete the well and then move to the PV-15 well. Echelon said additional success at PV-15 is expected to return field production to near processing Facility capacity of about 14 TJ/d (100% joint venture) and deliver at least 10 petajoules of gas. It will review the effect on reserves and production guidance at the end of the campaign.

Sector backdrop

Palm Valley is a gas field in the Amadeus Basin supplying the Northern Territory gas market. The Palm Valley permit participants are Central Petroleum (operator, 50%), Echelon Palm Valley Pty Ltd (35%) and Cue Palm Valley Pty Ltd (15%).

Gas wells in tight, naturally fractured reservoirs can show variable early performance, and short rig-based flow tests are not a precise guide to long-term rates. Water management is a recognised consideration in such fields.

Risks shareholders should weigh

The flow test was short, the rate had not stabilised, and trace water was detected during completion. The release says updated flow data will be determined once production starts, so the 3 to 4 TJ/d tied-in estimate is subject to change.

First gas is expected before the end of October 2026, which depends on completion and tie-in going to plan. The PV-15 well has yet to be drilled, and the 14 TJ/d and 10 PJ figures depend on its success.

Reserves and production guidance have not been revised and will be reviewed after the campaign. Gas sales rely on the Northern Territory gas supply agreement and on prices and volumes under it, which the release does not detail.

What’s next

Echelon expects first gas from PV-14 before the end of October 2026, after which updated flow data will be determined. The rig will then move to PV-15, and a review of reserves and production guidance will follow the campaign. Shareholders may wish to watch for production rates, water behaviour and PV-15 results.