Echelon Resources Readies Palm Valley Gas Well for First Flow Before End of October
Key Takeaways
- PV-14 is being completed as a gas producer and tied into the Palm Valley Production Station, with first gas expected before the end of October 2026.
- The open hole test flowed about 3mmscf/d (100% JV) with no water or oil recorded, and the rate was still rising when the 90-minute test ended.
- Current estimates put the tied-in rate at 3-4TJ/d, though trace water seen during completion means updated flow data is still to come.
- PV-15 is next, with further success expected to return field production to near the 14 TJ/d facility capacity and deliver at least 10 PJ (100% JV).
- Echelon holds 35% of the Palm Valley JV, so the 3mmscf/d, 14 TJ/d and 10 PJ figures all overstate its net share.
Palm Valley 14 completed as a gas producer, with first gas expected before the end of October 2026
Echelon Resources (ASX: ECH) advises that the Palm Valley 14 (PV-14) appraisal well is being completed as a gas producer and will be tied into the Palm Valley Production Station. First gas is expected before the end of October 2026.
The well reached a total depth (TD) of 2,942mMD on 14 September 2026. Current estimates for a tied-in rate from the well are 3-4TJ/d.
For investors, the key point is speed. The path from drilling to revenue-generating gas is short, with the well now being tied in rather than waiting on further appraisal.
Andrew Jefferies, Echelon CEO
“Palm Valley has delivered again… PV-14 means local gas for the Territory, quickly hooked up, keeping the lights on, businesses running and barramundi broiled.”
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What did the flow test and well design show?
Gas flows across 837m of wellbore
PV-14 was drilled at a deviated angle (up to 75 degrees) towards the northern flank of the Palm Valley Gas Field, located in Northern Territory Operating Lease 3. It targeted gas bearing intervals and fractures within the Pacoota P1 Formation.
The well intersected gas flows over approximately 837m measured along the deviated wellbore.
Open hole test summary
An open hole flow test (a test run in the uncased section of the well to measure how much gas it can deliver) produced the following results.
| Metric | Result |
|---|---|
| Test interval | 2,102.5mMD to 2,729mMD (1,904m to 2,041m TVD) |
| Choke and duration | ¾-inch, 90 minutes |
| Gas rate | Approximately 3mmscf/d (100% JV) |
| Flowing tubing head pressure | 210psi |
| Fluids | No water or oil recorded |
The gas rate had not stabilised and, by the end of the test period, was still increasing slowly. That suggests the test captured an early reading rather than a final one.
Water shutoff
Drilling operations were extended to isolate formation water ingress in the toe of the well using open hole packers. After some initial running issues, two open hole packers were run and set successfully, with flow testing indicating shutoff.
Trace water has been detected subsequently during completion operations. It is inferred to be clean up of water produced during underbalanced shutoff operations rather than from behind isolation packers.
Once production is underway and clean up continues, updated flow data will be determined.
How does an appraisal well become a producing gas well?
An appraisal well is drilled to test how much gas a known field can deliver. An open hole flow test then measures the gas rate before the well is fully lined and finished.
“Tie-in” means connecting the well to a production station, which processes the gas for sale. The sequence for PV-14 follows these steps:
- Drill the well
- Flow test
- Complete the well
- Tie in to the Palm Valley Production Station
- First gas
The test rate used mmscf/d (million standard cubic feet per day), while the tied-in estimate is quoted in TJ/d (terajoules per day, an energy measure). The two are different units, so they should not be compared directly.
What matters most is that the test rate is an early indicator. The tied-in rate is what ultimately drives revenue.
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What could local gas supply and PV-15 add?
Supply into the Northern Territory market
Gas produced from PV-14 will be sold into the Northern Territory gas market under a gas supply agreement negotiated with the Northern Territory Government in April 2026.
PV-15 is next
The Ensign 974 drilling rig is preparing to complete PV-14 before moving to drill the next well in the programme, Palm Valley 15 (PV-15). Additional success at the soon to be drilled PV-15 is expected to return field production to near processing facility capacity of approximately 14 TJ/d (100% JV) and deliver at least 10 PJ of gas (100% JV).
The next steps run in this order:
- PV-14 completion
- PV-14 tie-in
- First gas, expected before the end of October 2026
- PV-15 drilling
- Review at the end of the campaign
A review of the impact of the campaign on reserves and production guidance will be conducted at the end of the campaign, once PV-15 has been drilled. The announcement gives no indication of the outcome.
Joint venture structure
Participants in the Palm Valley permit OL3 are Central Petroleum (Operator, 50%), Echelon Palm Valley Pty Ltd (35%) and Cue Palm Valley Pty Ltd (15%).
The 3mmscf/d, 14 TJ/d and 10 PJ figures are all stated on a 100% JV basis. They do not represent Echelon’s net share, so keep that in mind when weighing what they mean for the company.
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