Australis Oil & Gas Ltd – First Half 2022 Financial Report


Australia Oil & Gas Ltd (“Australis” or “Company”) is pleased to provide its consolidated financial results for the six months ended June 30, 2022.

The solid financial performance of the first half of 2022 was largely driven by the increase in the price of oil, our sale price reached, before hedging effect, averaging $103/bbl. The impact of the hedges required by our credit facility reduced this average price reached to $82/bbl for the period. Inflationary cost pressures were experienced in 2022, causing most expenses to increase, including our operating costs.

Despite hedging losses and rising costs, the Company maintained its positive cash flow record with an EBITDA of $3.2 million (1H/2021: $1.1 million) and the reduction of net debt to $5.3 million. Activity in the TMS continued to increase with two wells fractured in 1S 2022. The Reece 11H No.1 well located in the SW of Amite County Mississippi and the Painter 5H No. 1 well located on the edge of Washington and Tangipahoa parishes, Louisiana. Reece 11H was successfully drilled and completed by State Line Exploration, the operating company of Juniper Capital Advisors and produced an IP24 rate of 1800 bopd and several months after completion was flowing at around 500 bopd without any form of artificial lift. Although Australis has no interest in this well, it is located in the heart of TMS and Australis owns and operates several wells nearby. The Painter 5H was successfully fractured by Paloma Resourcessupported by Encap Energy Capitaland while taking a conservative flowback approach, this well achieved an IP30 of 640 bopd and continues to produce at similar levels with a constrained reservoir management approach.

Australis, at 1H 2022, acquired 10% of WI in this well and the unit leases. The well was drilled in 2014, by a previous operator, with a relatively short side length of 5,000 feet and a small outside diameter of 5′ and remained a ‘Drilled But Uncompleted Well’ (DUC) until the second quarter of 2022. Australis continued the previously adopted and achieved strategy of preserving its ownership of the large undeveloped reserves and resources in the TMS core area while seeking to introduce a suitable partner to resume activity in the TMS and advance the strategy of value creation. The 18-month extension to the maturity date of the Company’s credit facility complements the TMS strategy by providing greater flexibility for our cash resources and cash flows.

While maintaining capital discipline, the extension allows for funding of the strategic land renewal and control program and participation in the second DUC well with Paloma in 2H 2022. The current balance of the installation of $14 millionwhich reduces by at least $1 million each quarter, is now reimbursable without penalty at the latest May 2025. The recent entry and success of the two well-funded private equity-backed operators (Status line and Paloma) in the TMS has helped our engagement with potential partners.

Australis has discussed and continues to discuss the partnership framework with several interested parties. Australis remains highly confident that underlying oil and gas market conditions will ultimately force potential partners to consider emerging areas for future Tier 1 well inventory and fundamental asset quality will ensure that TMS, being the one of the last undeveloped quality oil areas, is taken into account. As such, Australis will continue to be measured in approach to partnership discussions to ensure that any such engagement is on the right terms for the Company in the context of its overall strategy and is with the right partner(s).


Tel: +61 8 9220 8700

About Australia

Australis (ASX: ATS) is an ASX-listed oil and gas company that seeks to deliver value and growth to its shareholders through the strategic development of its quality onshore oil and gas assets in The United States of America. With approximately 83,500 net acres in the delineated production core of the proven oil producing TMS, Australis retains significant growth potential with approximately 360 net future drill locations and an independently assessed recoverable volume of 153 MMb of 2P+2C, of ​​which 3.0 MMb of production reserves providing a net cash flow field1. The contingent oil resource depends solely on a qualifying development program. Australis was formed by the founder and key leaders of Aurora Oil & Gas Limiteda team with a proven track record of creating and realizing shareholder value.

(C) Electronic news edition 2022, source ENP Newswire


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