Rey Resources Advances Canning Basin Exploration Amid Tight Cash Flow

Financial Overview

Rey Resources Limited (ASX: REY) disclosed its quarterly cash flow report for the period ending 31 March 2025, revealing a net cash outflow from operating activities of AUD 728,000. Investing activities further drained AUD 196,000, while financing activities contributed AUD 700,000, primarily through loan drawdowns. The company closed the quarter with a modest cash balance of AUD 52,000 but retains access to substantial loan facilities totaling AUD 6.39 million from key shareholders ASF Group Limited and Ms Wanyan Liu.

Exploration Progress in the Canning Basin

Rey Resources continues to focus on its oil and gas interests in Western Australia's Canning Basin, particularly the Fitzroy Blocks (EP457 and EP458) and the Derby Block (EP487). The operator has submitted a work variation application for EP457 to prioritize 2D seismic reprocessing before advancing to new seismic acquisition or drilling. For EP458, discussions are ongoing with regulatory authorities following a surrender application.

Meanwhile, the Derby Block, held 100% by Rey’s subsidiaries, is positioned within the regionally extensive Laurel Basin gas system. The company is actively engaging with Native Title holders and landowners to secure access for a proposed 3D seismic survey, alongside updating the environmental plan to meet regulatory requirements. These steps are critical to advancing exploration and potential development in this promising gas play.

Coal Project and Corporate Activities

In addition to oil and gas, Rey Resources is involved in the Duchess Paradise Coal Project, a proposed bituminous thermal coal operation contiguous with its Fitzroy Blocks. The company is reviewing Native Title Holder feedback on the project’s Protocol, indicating ongoing stakeholder engagement efforts.

Corporate governance disclosures reveal related party payments totaling AUD 48,460 during the quarter, comprising consulting and director fees. The company’s capital structure remains stable with over 211 million shares on issue and no new equity or convertible securities issued this quarter.

Funding and Outlook

Despite the cash outflows, Rey Resources’ available funding runway is estimated at nearly seven quarters based on current expenditure levels and available financing. This buffer provides some operational stability as the company advances its exploration programs. However, the low cash balance underscores the importance of prudent financial management and successful execution of exploration milestones to attract further investment or financing.

Overall, Rey Resources is navigating the challenging early stages of resource exploration with a clear focus on progressing seismic surveys and securing land access in key permits. The coming quarters will be pivotal in determining the commercial viability of its Canning Basin assets and the company’s ability to sustain operations amid tight liquidity.