Beetaloo Energy nears first gas at Carpentaria

We've got lots of uh electricians and other workers on site, pulling together the final pieces of the plant, and we expect to be selling our first gas later this quarter.

Be Energy Australia, ASX ticker BTL, holds 28.9 million acres of oil and gas exploration tenaments in the Northern territory. The company has released its September quarterly report with its Carpentaria pilot project heading towards first gas sale. Here to tell us more is managing director Alex Underwood. Alex, welcome back.

Hi Lauren.

Now, firstly, can you give us an overview of Beelu Energy and how the Carpentaria pilot project is progressing?

Certainly. So, as the name suggests, we are one of the most active players in the Belu Basin. This is one of the largest undeveloped gas resources in the world. Over the last eight years or so that I've been involved, we've been actively progressing our developments, particularly the Carpentaria pilot project. So, this is an area on the eastern side of the basin. It contains about 5 trillion cubic feet of recoverable gas, which is a very large volume and we will be imminently commencing the sale of pilot gas from that project.

And can you tell us about the Carpentaria 5H flow test and what those results showed about the well and the resource.

Absolutely. So during the quarter, we completed IP30 flow testing of the Carpentaria 5H well. That was the first well we've drilled, which is a typical full scale 3 km horizontal well like you'd see in the US shale gas industry. Um it was also the largest fracture stimulation job in Australian history, which was a great milestone for our company. and what we saw was that the well produced at about 6.7 terajoules per day over that 30-day test period with a very low rate of decline, which has reinforced resource estimates of around 10 petajoules of gas per well.

Now mechanical work on the gas plant is largely done. What's left before commissioning and how soon after that the first pilot gas sales follow?

Yeah, absolutely. So we've got all the major equipment on site now. We've got lots of electricians and other workers on site, pulling together the final pieces of the plant, and we expect to be selling our first gas later this quarter.

You launched Beelu Digital during the quarter. Can you tell us about the idea and why gas to power and data centers?

Yeah, certainly. So, first of all, we've got this massive gas resource. We're very proud to be supporting the local NT market by selling our pilot gas to the Northern Territory government under a 10-year gas sales agreement. But as a small and entrepreneurial company, we're always looking to develop additional markets for our gas. Um what we've seen through our relationships both here in Australia and the United States is that the biggest constraint on data center development globally, which is a massive boom industry that is really transforming all of our lives. Um the constraint is access to power. This started emerging in the US East Coast grid about 12 or 18 months ago, and in the US they've started moving towards what's called behind the meter generation, so data centers generating their own power, often times where the gas is located, so you're seeing a lot of data center development in places like West Virginia and now in Texas. Um, and and we foresaw that the same constraints would start emerging in Australia. Um that has indeed happened. We're just seeing a lot of news in the financial press in the last week about challenges that data center operators are facing to access power. And so, our thematic is really about driving our gas resource, um but also the incredible solar resources available in the northern territory, um to help fund that next wave of development, which is highly consistent with the goals of the Northern Territory government, who want really want the territory to be seen as the digital gateway to Asia, given that it is so close to those major Asian population centers.

The R&D refund strengthen the balance sheet with $113 million in liquidity at quarter end, and you plan to repay the Maquery R&D loan. How does that position you to fund the pilot project?

Yeah, well, we're fully funded to first gas and I've got to say in the current equity market conditions, I'm very pleased that that's the case. Um so we ended the quarter with a bit over $51 million cash in the bank, uh and around $61 million of undwn credit facilities. As you mentioned, during the quarter, we received a 19 million dollar R&D tax rebate. Uh we will be utilizing part of those funds to fully repay the Macquarry R&D facility, which is drawn to about $12 million. Um and so yeah, we're in a very solid financial uh position right now to really focus on execution.

Tamboran has started gas sales and Santos has spotted its first Beal appraisal well. What does that pick up in activity mean for Beel energy? and what should shareholders expect over the next few months?

Oh, look, these these are major developments for us and for the broader Belu Basin. So, first of all, amazing news to see Tamboran commence gas sales very recently. Um if I've got my facts right, I believe that's the first time gas has been sold out of a new basin in Australia in nearly two decades. So a huge achievement. Um and and as you mentioned, we're also now seeing Santos in the midst of a critical three-well appraisal program in the block neighboring our Carpentaria project. Um what the the overarching comment I would make about this is that the rising tide absolutely lifts all boats. So, you know, from a technical perspective, we can all learn from each other's successes as we get up these technical learning curves. but also the dramatic increase in investment coming into the basin across Tamboran, Santos and indeed Ix coming in uh as joint venture partner to Daily Waters energy. It means more equipment, more services, more people. That's going to drive down costs and drive up activity.

Alex, thanks for the update.

Thanks, Lauren.