NuEnergy’s AUD 2 Million Exploration Spend Drains Cash to AUD 450K
NuEnergy Gas Limited reported a cash outflow for the September quarter, continuing its exploration spend while progressing an early gas sales initiative and preparing for further capital raising.
- Net cash used in operating activities of AUD 21,000 for the quarter
- Capitalised exploration expenditure of AUD 1.96 million
- Cash balance at quarter end of AUD 450,000
- Fully drawn loan facilities totaling AUD 3.14 million from related parties
- Early Gas Sales Initiative targets 1 million standard cubic feet per day with PT Perusahaan Gas Negara
Quarterly Cash Flow Overview
NuEnergy Gas Limited’s latest quarterly cash flow report for the period ending 30 September 2025 reveals continued investment in exploration activities, with a net operating cash outflow of AUD 21,000 and capitalised exploration expenditure nearing AUD 2 million. The company closed the quarter with a modest cash balance of AUD 450,000, underscoring the tight liquidity position as it advances its coal bed methane projects.
Funding and Loan Facilities
The company’s funding structure remains heavily reliant on related-party loans, with facilities fully drawn to the tune of AUD 3.14 million. These unsecured loans, provided by subsidiaries of the ultimate parent company, carry a 10% annual interest rate and are repayable on demand, contingent on future capital raising. This arrangement highlights NuEnergy’s dependence on external financing to sustain its exploration and development phases.
Progress on Early Gas Sales Initiative
Amid the cash burn, NuEnergy is making strategic moves to monetise its assets. The company has embarked on an Early Gas Sales Initiative targeting initial sales of 1 million standard cubic feet per day of coal bed methane. A Heads of Agreement has been signed with PT Perusahaan Gas Negara Tbk (PGN), Indonesia’s leading natural gas distributor, pending formalisation of a Gas Sales and Purchase Agreement following regulatory approval. This initiative could mark a pivotal step towards generating operational revenue.
Outlook and Capital Raising Plans
NuEnergy acknowledges that its operating cash flows will remain negative until production phases commence and revenue streams are established. The board is actively monitoring cash flow and is finalising plans for a capital raising to secure the company’s financial sustainability. While confident in its ability to raise funds, the timing and success of such efforts remain critical to maintaining ongoing operations and advancing drilling programs.
Strategic Considerations
The company’s ability to scale exploration activities will be closely tied to its financial position, with drilling programs adjustable based on available capital. The Early Gas Sales Initiative offers a potential revenue buffer, but the broader transition from exploration to production remains a key milestone. Investors will be watching closely for updates on the formal gas sales agreement and the outcome of forthcoming capital raising efforts.
Bottom Line?
NuEnergy’s next chapter hinges on successful capital raising and formalising gas sales to extend its runway beyond a precarious cash position.
Questions in the middle?
- When will NuEnergy finalise and execute the formal Gas Sales and Purchase Agreement with PGN?
- What are the specifics and timeline of the planned capital raising, and how might it impact existing shareholders?
- How will NuEnergy balance exploration expenditure with its limited cash runway in the coming quarters?
