HyTerra is withdrawing from its natural hydrogen project in Nebraska and concentrating its exploration budget on the wholly owned Kansas Rift Play, while postponing its next planned well until 2027.
The decision removes US$17.33 million in remaining funding commitments but also means forfeiting a 16.03% interest and US$2.67 million already invested in the Geneva Project.
The portfolio restructuring follows a corporate reset initiated in September. HyTerra said the withdrawal from the Joint Development and Earn-in Agreement (JDA) with Natural Hydrogen Energy reflects a decision to prioritize projects where it has greater operational control and can determine the scope and timing of exploration.
The company will retain no interest in the Nebraska project and expects to recognize a non-cash impairment of approximately A$7.5 million against previously capitalized exploration expenditure. The charge will affect reported earnings but will not represent an additional cash outflow.
Completing the original earn-in would have required another US$5 million for the first phase and US$15 million for the second. By exiting, HyTerra avoids those future commitments, although the decision also eliminates its exposure to any potential upside from the project.
Kansas Rift Play becomes exploration priority
HyTerra’s US strategy will now center on the Rift Play, which underlies more than 80% of its Kansas acreage and is entirely owned and operated by the company. The decision follows production testing at McCoy-1, which influenced the company’s assessment of geological conditions needed for hydrogen accumulation.
The results from McCoy-1 were limited. A 14-day flow test recorded an estimated gas flow rate of approximately 0.1 thousand standard cubic feet per day, with air-corrected hydrogen concentrations of 0.4% and helium concentrations of 2.8%. The results did not support further appraisal of the well at this stage.
HyTerra considers the Rift Play more prospective than the Ridge Play because it is closer to interpreted hydrogen source rocks associated with the Midcontinent Rift. No further McCoy-1 appraisal or additional Ridge Play drilling is planned while the company completes its technical assessment.
Larson 1-14 drilling postponed to 2027
The shift in priorities also delays drilling at Larson 1-14, previously identified as a high-ranked target for October 2026. HyTerra is now evaluating additional prospects within the Rift Play before selecting its next drilling location.
The technical program combines geological interpretation, external research, data from McCoy-1 and laboratory analyses. Tests have demonstrated hydrogen generation from selected Midcontinent Rift rock samples under controlled laboratory conditions. However, these results do not establish the presence of commercially recoverable hydrogen in the subsurface.
HyTerra has also appointed RISC Advisory to independently audit its prospective hydrogen and helium resources across its Kansas acreage, with completion targeted for the fourth quarter of 2026. Larson 1-14 remains permitted, but the company intends to resume drilling during the 2027 season, either at this location or at a higher-ranked target.
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