Galilee Energy readies Zydeco-1 sidetrack after a A$3.5M raising

Galilee Energy (ASX:GLL) is preparing to sidetrack its Zydeco-1 well. The sidetrack will kick off from the existing casing at about 2,760 feet. The company has not stated a start date.

The work matters because the raising that pays for it is small next to the company's reported gas holdings, and the target is oil. Galilee says Zydeco is held at a 100% working interest and a 70% net revenue interest, and describes a shift towards a US Gulf Coast strategy.

What is planned

On 25 August Galilee expanded the sidetrack to seven targets after identifying five shallow oil zones. Unrisked gross Prospective Resource across the targets is 317.0 thousand barrels (2U) and 422.6 thousand barrels (3U). Upper Tweedel remains the main target. The Stafford target has no resource attributed. Prospective resources are estimates of oil that has not yet been found, so a dry result is possible.

How it is funded

Galilee has firm commitments to raise A$3.5M by issuing 777.8 million shares at A$0.0045, each with a free listed option. That price is below the A$0.007 of December. Directors' participation of A$135,000 needs shareholder approval.

The raising followed a rocky stretch. ASX directed Galilee to announce its capital raising status by 10 August, and the company did not comply. Its shares stayed suspended until the announcement was released. A cleansing prospectus lodged on 25 August offers only 1,000 shares to raise A$4.50. It exists to lift trading restrictions on shares from the placement.

What else the company holds

The company reported a net loss of A$5.42M for FY26, against A$3.17M a year earlier. It attributed most of the increase to A$3.89M of Zydeco drilling preparation and Glenaras pilot costs.

Its largest estimates are gas contingent resources, all at P50:

• Glenaras Gas Project: 2,508 PJ (March 2025), 100% owned
• Kumbarilla Project: 504 PJ (2020), 100%
• Glenaras West: 250 PJ (2018), 100%
• Laugharne Creek: 150 PJ (2018), 100%
• Acacia North: 50 PJ (2018), 100%

It also lists Albany (153 PJ) and Gunn (67 PJ), both from 2018, with its interest not disclosed. Hoffer B, a 2014 prospective estimate of 70 bcf of gas and 1.8 million barrels of oil, is held at 35%.

The Zydeco result would be the first test of whether the company's new oil focus delivers. If it succeeds, it would sit alongside a gas portfolio whose estimates are mostly several years old.