The Galilee Energy Ltd (ASX: GLL) share price is up from 14 cents per share this time last year to 57 cents today despite the energy explorer being vulnerable to the fall in oil and gas prices over the final quarter of 2018.
The company’s flagship exploration and development project is the Glengaras gas fields in the Galilee Basin of Queensland possess one of the largest uncontracted gas resources on the east coast of Australia according to the company.
Galilee also reports that the east coast gas market is likely to remain undersupplied or “structurally short” over the medium term, which naturally means its Glengaras fields have a huge opportunity to supply the east coast market at rising prices.
While Galilee has an exciting story and some impressive reserves on paper at its 4,000 square kilometre Galilee Basin gas fields it posted zero revenue and a $3.06 million operating cash outflow for the quarter ending September 30, 2018.
The company recently raised $13 million at 60 cents per share via a placement to professional investors, with the funds being used to develop its gas tenements to proven reserves.
The $13 million raised is in addition to $7.5 million cash on hand as at September 30 2018, but gas exploration is a costly business, with the stock likely to remain volatile in 2019.
Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.