Hydrocarbon Dynamics Revives North Sea Trial, Secures $718K Rights Issue

Global Trials Gain Momentum

Hydrocarbon Dynamics Limited (ASX – HCD) reported a busy quarter marked by the reactivation of its North Sea trial after significant delays. The trial involves the application of its proprietary HCD Multi-Flow product, designed to combat paraffin deposition; a costly issue that hampers oil production. Early indications suggest the treated well is producing strongly, although it remains unclear whether this improvement is due solely to the product or other operational factors.

Beyond the North Sea, HCD has made progress in several international markets. In the United States, a Californian operator expanded its trial from one to two wells after initial success, targeting a potential market of approximately 400 wells. In Canada’s Alberta oil fields, new opportunities have emerged through distributor Quadra Chemical, with samples undergoing testing. Malaysia and Indonesia continue to show promise, with discussions advancing toward field trials and commercial supply agreements, particularly at the PENARA Puteri Cluster and Puyuh Block respectively. Pakistan also remains a focus, with potential flow assurance treatments for major oil transfer pipelines under negotiation.

Strategic Joint Venture and Energy Sector Expansion

In a strategic move, HCD entered a joint venture with Arrow Exploration to assess an extension of the Montney play in Alberta, Canada. This partnership grants access to 2,560 acres of promising oil and gas territory, with plans to expand the land position pending data review. Notably, there are no immediate work commitments, allowing HCD to evaluate the opportunity with flexibility.

Simultaneously, the company is exploring broader energy sector investments, including uranium and associated minerals projects in Canada. This diversification aligns with global trends toward energy transition and resource security, potentially positioning HCD for growth beyond its core oilfield chemical technologies.

Financial Position and Capital Raising

Financially, HCD completed a fully underwritten non-renounceable rights issue in August 2025, raising $718,741 before costs through the issuance of over 359 million new shares. Shareholder uptake accounted for approximately $213,000, with the balance underwritten by key stakeholders including Chairman Stephen Mitchell, Mr. Shorrocks, and Peloton Capital Pty Ltd. The company ended the quarter with nearly $1 million in cash reserves and no debt, providing a solid runway for ongoing operations and development activities.

Operating cash flow was negative $253,000 for the quarter, reflecting continued investment in trials, product development, and corporate costs. Royalty payments to related parties amounted to $74,000, consistent with prior periods. HCD also reported small-scale sales and ongoing trials of its HCD Multi-Flow product across multiple regions, underscoring its commitment to commercialisation and market expansion.

Environmental and Soil Remediation Initiatives

In addition to oilfield applications, HCD is advancing trials of its environmentally friendly soil remediation product, HCD Salt Reducer. Comprising 72 naturally occurring minerals, this organic chelant aims to improve soil quality and crop yields by reducing salt content and enhancing root development. Small-scale trials are planned following promising historical results, potentially opening new revenue streams in agriculture and environmental management.

Overall, Hydrocarbon Dynamics is navigating a complex landscape of technical validation, geographic expansion, and capital management. The company’s ability to convert trials into commercial contracts and to leverage its joint venture in Canada will be critical to sustaining momentum.