Cue Energy Reports $17.1M Cash, WM29 Well Doubles Gas Output
Cue Energy delivered a robust quarter with $4.3 million net cash flow and a $17.1 million cash balance, driven by strong drilling results and production growth across its Australian and Indonesian assets.
- Net cash flow of $4.3 million for the quarter with $17.1 million cash on hand
- Mereenie field well WM29 outperforms expectations with 6 TJ/d gas production
- Mahato PSC’s first horizontal well PB-30 producing over 600 barrels of oil per day
- Progress toward Final Investment Decision on Paus Biru gas project in Indonesia
- No debt and development activities fully funded, underpinning financial strength
Strong Financial Position and Operational Momentum
Cue Energy Resources has reported a solid quarter ending 31 December 2024, reinforcing its position as a resilient player in the oil and gas sector. The company generated a net cash flow of $4.3 million, lifting its cash balance to $17.1 million while maintaining a debt-free balance sheet. This financial robustness underpins Cue’s ongoing development activities and strategic growth plans.
The company’s diverse portfolio across Australia, Indonesia, and New Zealand continues to deliver steady production and cash receipts, with total production holding at approximately 1,600 barrels of oil equivalent per day (boe/d) and cash receipts steady at $13.1 million for the quarter.
Mereenie Field Exceeds Expectations
The highlight of Cue’s Australian operations was the successful air-drilling and commissioning of the WM29 development well in the Mereenie field. Achieving a gas production rate of 6 terajoules per day (TJ/d), WM29 doubled pre-drill expectations and surpassed previous well performance in the field. This increase is expected to help the Mereenie field approach its pre-drill production target of 30 TJ/d, with the next well, WM30, already underway.
Gas sales from Mereenie and Palm Valley fields have helped mitigate the impact of the Northern Gas Pipeline closure, which has been offline since February 2024. The firm gas contracts with the Northern Territory Government provide a stable revenue base for up to 6 TJ/d from these wells.
Advances in Indonesian Assets
In Indonesia, Cue’s Mahato PSC saw the successful drilling of three development wells, including PB-30, the field’s first horizontal well, now producing over 600 barrels of oil per day. This marks a significant operational milestone and supports the ongoing Field Development Optimisation plan, with seven of fourteen approved wells drilled to date.
Meanwhile, progress continues on the Sampang PSC, where Cue holds a 15% interest. The operator, Medco Energi, is negotiating with the Indonesian government for an extension of the PSC beyond its 2027 expiry and amendments to facilitate the Paus Biru gas project. This project, involving a subsea pipeline and wellhead platform, could add 20-25 million cubic feet per day (mmcfd) of gas production and potentially increase Cue’s participating interest by 10% following the exit of a joint venture partner.
Steady Performance in New Zealand
Cue’s 5% stake in the Maari field in New Zealand continues to deliver consistent oil production. The joint venture is pursuing value-enhancing initiatives including production optimisation and CO2 reduction projects, while awaiting government approval for license extension applications submitted earlier in the fiscal year.
Environmental and Corporate Governance Updates
Reflecting its commitment to sustainability, Cue updated its FY24 emissions estimates to include its share of emissions from Australian assets operated by Central Petroleum. The company reported a Scope 1 emissions intensity of 0.022 tonnes of CO2 equivalent per barrel of oil equivalent produced, aligning with industry transparency standards.
Corporate governance remains strong, with all resolutions passed at the recent Annual General Meeting, and the company maintaining clear communication channels with investors and stakeholders.
Bottom Line?
Cue Energy’s strong cash flow and operational advances set the stage for pivotal decisions on Indonesian gas projects that could reshape its growth trajectory.
Questions in the middle?
- Will the Paus Biru project secure final investment approval and what timeline is expected?
- How will the potential increase in Cue’s interest in the Sampang PSC impact future production and revenues?
- What are the implications of the Northern Gas Pipeline closure on Cue’s Australian gas sales beyond February 2025?
