Metgasco Faces Debt Pressure as Production Declines Persist
Metgasco reports a 4% dip in quarterly sales revenue and a 9% drop in production, while launching a Production Uplift Program funded by a $750,000 capital raise. Operational improvements at Odin and Vali fields helped slow the decline.
- 4% decrease in quarterly sales revenue to $591,550
- 9% decline in production to 0.05 PJe, with moderated decline rate
- Production Uplift Program initiated in late July to boost output
- Partially underwritten entitlement offer raised approximately $750,000
- Cash balance at quarter-end $1.12 million; total debt $5.69 million
Quarterly Performance Overview
Metgasco Limited has released its quarterly activities report for the period ending 30 June 2025, revealing a modest decline in both sales revenue and production volumes. Sales revenue fell 4% quarter-on-quarter to $591,550, while production decreased by 9% to 0.05 petajoule equivalent (PJe). Despite these declines, the company highlights that operational initiatives have successfully moderated the rate of production drop, particularly at its Odin and Vali gas fields.
Operational Highlights and Production Uplift Program
The Odin gas field averaged 2.33 million standard cubic feet per day (MMscfd) of raw gas production, while the Vali field produced 0.76 MMscfd during the quarter. Notably, total raw gas production peaked in May at 100 million standard cubic feet (MMscf), the highest since January 2025. Operational measures such as back pressure reduction, cycling of the Odin-2 well, and instrumentation reliability improvements contributed to stabilizing output.
Following these efforts, Metgasco initiated its Production Uplift Program in late July, aiming to enhance gas production across all wells in the Odin and Vali fields. This program, originally delayed by regional flooding, is expected to positively impact production, sales, and cash flow in the upcoming September quarter.
Financial Position and Capital Raising
To support the uplift program and working capital needs, Metgasco completed a partially underwritten, non-renounceable entitlement offer between May and June 2025. The offer raised approximately $750,000 before costs, with the underwriter placing the shortfall shares. The company ended the quarter with a cash balance of $1.12 million, bolstered by the capital raise and a government rebate related to environmental rehabilitation at the Cervantes-1 site.
However, Metgasco’s total debt remains significant at $5.69 million, comprising secured and unsecured loans with accruing interest. The company continues to manage these obligations while pursuing operational improvements and strategic reviews.
Corporate Developments and Strategic Outlook
In corporate governance news, Metgasco appointed Tom Chapman as a non-executive director in June 2025, signaling a potential strengthening of its board expertise. The company is also engaged in a strategic review with corporate advisors PAC Partners, which may shape its future direction amid a challenging energy market environment.
While the June quarter showed some production softness, the combination of operational optimisation and fresh capital injection positions Metgasco to potentially reverse the downward trend in the near term. Investors will be watching closely for tangible results from the Production Uplift Program and any strategic announcements arising from the ongoing review.
Bottom Line?
Metgasco’s next quarter will be pivotal as the Production Uplift Program kicks in, testing whether operational gains can offset ongoing production challenges.
Questions in the middle?
- How effective will the Production Uplift Program be in reversing production declines?
- What are the implications of Metgasco’s debt structure and potential equity dilution?
- Will the strategic review lead to significant changes in company direction or asset portfolio?
