Australian Oil Company (AOK) reported progress in its March 2025 Quarterly Activities Report, highlighting increased gas flows from its Californian operations. The completed connection of an acquired pipeline has enabled the Reclamation Board-8 well to flow at rates exceeding 200mcf/d, with Reclamation Board-7 expected to come online shortly. Management conducted a site visit focused on boosting production and cutting costs, while also evaluating complementary acquisition opportunities in California.
Gross gas flows for the quarter totaled 22,799 mcf, compared to 33,532 mcf in the December 2024 quarter, with the decrease attributed to temporary pipeline shutdowns during the connection process. AOK anticipates significant increases in gas flows from the Rio Vista wells, potentially quadrupling previous volumes without substantial additional operating costs. A goal of 50,000 mcf of quarterly gas flows is set.
AOK completed the Omnibus Settlement Agreement, receiving A$1,200,000 and additional consideration of $38,782 in Xstate Resources Limited shares. The company is reviewing Australian gas exploration opportunities, focusing on regions with favorable regulations and access to east coast markets.
Looking ahead, AOK aims to proactively engage with shareholders regarding its Californian projects and future opportunities. The strategic plan includes restructuring debt to enhance the profitability of Californian production. Due diligence continues on both domestic and Californian opportunities. Exploration expenditure for the quarter was $24k related to the pipeline acquisition, while production expenditure totaled $247k. Payments to related parties amounted to $123k, covering Directors’ salaries and superannuation.
Cash flow statements show receipts from customers at $132,000, with net cash used in operating activities at $704,000. Proceeds from the disposal of investments generated $1,215,000, resulting in a net increase in cash and cash equivalents of $505,000, bringing the total to $1,401,000 at the end of the quarter. The company estimates 1.28 quarters of funding available, and outlines plans to improve operating cash flows and optimize gas flow rates.