Galilee Energy (ASX: GLL) Raises A$3.5 Million for Zydeco Sidetrack

Galilee Energy has secured firm commitments for a A$3.5 million placement before costs. The funds will principally finance a sidetrack at its Zydeco-1 gas-condensate well in Louisiana.

The program will evaluate Homeseeker B, Stafford and the deeper Tweedel objectives. Galilee holds a 100% working interest and 70% net revenue interest in the project.

Placement Terms and Approvals

Galilee will issue 777,777,778 new shares at A$0.0045 each. Subscribers will also receive one free-attaching listed option for every new share.

Those options carry an A$0.011 exercise price and expire on February 20, 2029. Directors or their nominees have subscribed for A$135,000, subject to shareholder approval.

The placement comprises two tranches. Tranche one will raise about A$936,651 through 208,144,764 shares under Galilee’s existing placement capacity.

Tranche two involves 569,633,014 shares and will raise about A$2.56 million. It requires approval at an extraordinary general meeting expected in early October.

The first tranche is intended to reinstate the rig over Zydeco-1 and prepare it for operations. Drilling is scheduled to commence after the meeting and receipt of tranche-two funds.

A Shorter Route Back Underground

The original Zydeco-1 well reached 9,393 feet before stuck pipe interrupted drilling in the open-hole section. Galilee concluded that sidetracking from the existing well offered the most efficient route forward.

The surface casing, wellhead, drilling location and permits remain available for reuse. The proposed sidetrack would begin around 2,760 feet and reach approximately 9,800 feet measured depth.

A shallower casing point and shorter well path should reduce exposure to the lost-circulation interval encountered previously. Final execution remains subject to approved costs, technical planning, contractor availability, funding and regulatory requirements.

Before the interruption, Homeseeker B was encountered at the forecast depth with elevated hydrocarbon indications. The newly identified Stafford interval produced readings above the gas detector’s 5,000-unit upper limit across the full interval.

However, those readings are preliminary exploration indicators. They do not establish the size, recoverability or commercial significance of any accumulation.

Tweedel Remains the Main Test

Upper and Lower Tweedel contain gross unrisked prospective resources of up to 13.7 billion cubic feet of gas. The estimate also includes up to 610,000 barrels of condensate.

Those figures represent the high case and are not adjusted for discovery or development risk. No prospective resources have been assigned to Homeseeker B or Stafford.

Managing Director Joseph Graham said: “This Placement provides the funding required to move directly into the next phase of Zydeco-1 and continue the evaluation of all three gas-condensate targets.”

Strategic Reset Around the Gulf Coast

The financing follows Galilee’s proposed sale of the Glenaras Gas Project group to Novus Energy Production Company. Completion remains subject to regulatory approvals, third-party consents and other customary conditions.

If completed, Novus will assume Glenaras’ future funding and rehabilitation obligations. Galilee will retain a 2% net overriding royalty and may receive other payments under the transaction terms.

Together, the placement and proposed sale concentrate Galilee’s resources on Zydeco and its broader US Gulf Coast strategy.