Echelon Resources Limited (ASX:ECH), an energy company involved in the exploration, development, and production of oil and gas assets, has reported a robust first quarter for the period ended 31 March 2026. The company highlighted a significant 30 per cent increase in operating cash flows, reaching A$12.1 million, alongside a strategic A$6.0 million reduction in debt. Echelon also confirmed the acceptance of Horizon’s takeover offer for its shareholding in Cue Energy Resources, a move expected to further reduce debt and see Echelon hold at least 6.1 per cent of Horizon’s shares upon completion.
Operationally, Echelon made substantial progress, particularly within the Amadeus Basin. The Palm Valley Joint Venture signed a new Gas Supply Agreement (GSA) with the Northern Territory Government, securing supply through to 2034 with inflation-indexed pricing. This agreement underpins the drilling of two new infill wells, PV-14 and PV-15, with a rig contract executed and site works underway for an expected mid-year spud. The company noted a “step change” in revenue settings as legacy gas contracts concluded, replaced by higher-priced agreements that commenced in January 2026.
While production volumes for the quarter were down 6.5 per cent compared to the previous quarter, totalling 380,648 barrels of oil equivalent (boe), the underlying financial performance remained strong. Production at Kupe was affected by unplanned shutdowns, and Maari oil production saw a decrease due to scheduled maintenance and a well fault, with a workover in progress. Conversely, Mahato oil production, after a temporary shut-in in early 2026, returned to pre-incident levels by late February. The Group maintained a cash balance of A$32.5 million and paid a dividend of A$1.8 million to shareholders.
Echelon is positioned for future growth, leveraging improved pricing and contracted gas sales. The ongoing development programme, coupled with the planned divestment of its Cue shareholding, is expected to support continued execution and value creation across its diversified portfolio.
