Cue Energy 2P Reserves Fall As Portfolio Review Flags Impairment

Cue’s reserves and resources shrank sharply, triggering multi-million dollar write-downs.

Risk flags

• ●Reserve and resource depletion is accelerating, with 2P reserves down 18% and 1P reserves down 38% year-over-year. This trend reduces future production potential and may impact asset valuations.
• ●The company is booking a non-cash impairment of up to $5 million and has written off $4 million in capitalised costs, signalling that prior capital allocation has not delivered expected returns and may reflect further asset risk.
• ●Forward-looking statements about new drilling and prospective resources lack concrete plans, cost estimates, or timelines, making any future upside speculative and subject to both geological and commercial risk.

Bottom line

Cue’s reserves and resources update points to a shrinking asset base, with explicit write-downs and impairments totalling up to $9 million. The only growth area—Mahato—adds just 0.2MMboe, while major assets like Sampang, Maari, and Mereenie are revised downward or face withdrawal and production cessation. The company’s narrative is factual and avoids hype, but the numbers show a deteriorating outlook with no offsetting operational or financial positives. Any future upside from new drilling or the Mereenie Footwall prospect is unproven and distant, with no disclosed development plan. For investors, the most important takeaway is the clear negative trend in reserves and the immediate impact of impairments on reported results. Unless future disclosures provide evidence of successful new drilling or resource conversion, the investment case is weakening.

Announcement summary

(ASX:CUE) Cue Energy Resources reported Proved and Probable (2P) reserves of 4.5 million barrels of oil equivalent (MMboe) at 30 June 2026, down from 5.5MMboe a year earlier after production and portfolio revisions. The movement reflects 0.6MMboe of production during FY26 and net downward revisions of 0.4MMboe. Cue expects the reserve changes to result in a non-cash impairment of up to $5 million across its Maari and Sampang assets in its FY26 financial statements. The portfolio review identified additional infill drilling opportunities at Mahato and a new unrisked 2U Prospective Resource of 0.7MMboe at Mereenie Footwall, equivalent to 4.0 petajoules of gas. Proved (1P) reserves closed FY26 at 2.6MMboe compared with 4.2MMboe a year earlier, reflecting 0.6MMboe of production and 1.0MMboe of downward revisions. Cue’s 2C Contingent Resources decreased from 5.6MMboe to 3.9MMboe after 2.4MMboe associated with Paus Biru and Jeruk was removed. Cue has separately written off approximately $4m of capitalised costs associated with Paus Biru following its previously announced decision to withdraw from the project.

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