Cue Energy Resources Limited (ASX: CUE) has announced the execution of a binding multi-year Gas Sales Agreement (GSA) with the Northern Territory Government, a move that underpins the Final Investment Decision to drill two new wells in the Palm Valley field. Cue Energy Resources Limited is an ASX-listed oil and gas production and exploration company based in Melbourne, with revenue generated from gas and oil production across Indonesia, onshore Australia, and offshore New Zealand. This strategic agreement is set to significantly bolster the company’s contracted gas position and enhance production capabilities in the region.
Under the terms of the GSA, up to 3.2 petajoules (PJ) (Cue’s share) of gas will be supplied on a firm basis from the second half of 2026 through to the end of 2034. The agreement features take-or-pay provisions and a fixed price, which will be indexed to inflation, providing long-term revenue certainty. To facilitate this supply, the Palm Valley Joint Venture has commenced preparations for drilling two new wells. Key approvals are either in place or underway, long-lead items have been ordered, a drilling rig is contracted, and civil works are substantially complete, with drilling for the first well slated to begin mid-year. Production from these new wells is anticipated to come online progressively throughout the second half of 2026.
This new GSA supersedes proposed gas supply arrangements outlined in a Letter of Intent (LOI) with the Northern Territory’s Power and Water Corporation (PWC LOI), announced in December 2025, which had contemplated supply from the Mereenie gas field but did not result in a definitive agreement on volume and pricing. Cue Energy CEO, Matthew Boyall, commented on the announcement, stating, “This agreement materially increases Cue’s contracted gas position through to 2034 and supports new production from Palm Valley. It adds long-term contracted cashflow and underwrites investment in the two new wells and increased production at Palm Valley, strengthening Cue’s forward revenue profile.” The Palm Valley permit OL3 participants include Central Petroleum (NT) Pty Ltd (Operator, 50%), Echelon Palm Valley Pty Ltd (35%) and Cue Palm Valley Pty Ltd (15%).
