Vulcan Energy Shares Rally on Successful Well Test and Management Restructuring

Vulcan Energy AU0000066086

Shares of Vulcan Energy Resources Ltd. saw significant upward momentum today following a pair of key announcements from the company. The dual news items—a successful production test at a flagship project and a revised executive compensation structure—provided fresh confidence to investors, helping the stock recover a portion of its recent declines.

At 11:08 AM CET, Vulcan released results from a production test at the LSC-1b sidetrack well, part of its Lionheart project in the Upper Rhine Valley. The data confirmed strong potential flow rates between 105 and 125 liters per second, aligning with the assumptions outlined in the Phase 1 Field Development Plan.

This outcome resolves a period of uncertainty that began in November 2025, when initial geological and thermal data were positive, but a technical completion issue prevented the company from verifying the well's production potential. The recent test confirms that issue has been successfully remedied.

Key Test Highlights:
* The testing equipment operated at its maximum capacity.
* Measured flow rates support the economic assumptions of the Lionheart development plan.
* Reservoir quality, lithium concentration, temperature, and pressure all met or exceeded expectations.
* The well was completed safely, ahead of schedule, and with no reportable incidents.

This successful validation underpins the economics for Phase 1 of Lionheart. The phase’s development, which commenced in December 2025, is fully funded by a €2.193 billion financing package. This includes a €250 million anchor loan from the European Investment Bank and €204 million in German government grants.

Executive Compensation Revised for New Phase

In a separate announcement at 11:16 AM CET, Vulcan detailed updated remuneration packages for its top leadership, approved by the Board and effective retroactively from January 1, 2026. The changes reflect the company's transition from a development-stage entity to one focused on construction.

• Managing Director and CEO Cris Moreno will see his fixed remuneration rise to 804,000 AUD plus statutory superannuation. He will also assume the chairmanship of the Advisory Boards for Vulcan’s German holding companies.
• Executive Director and Group CFO Felicity Gooding’s fixed remuneration increases to 670,000 AUD plus superannuation. She is additionally appointed as joint Managing Director of Vulcan Energie Ressourcen GmbH.

Both executives will have significantly higher short-term incentive opportunities. The Short-Term Incentive (STI) potential has been doubled from 25% to 50% of their fixed pay. The additional 25% component is subject to a 12-month vesting period.

Market Reaction and Trading Context

The positive operational update drove above-average trading activity, with over 4.7 million shares changing hands today. This surpasses the four-week average volume of approximately 4 million shares.

While the stock has gained roughly 10% over the past four weeks, recovering from December lows around AUD 3.70, it continues to trade well below its November 2025 levels of over AUD 6.00 and its 52-week high of AUD 7.52.

Path Forward: Construction and Upcoming Reports

With financing secured, construction work on Lionheart Phase 1 is now underway. The project aims for an annual production capacity of 24,000 tonnes of lithium hydroxide monohydrate, which Vulcan states is sufficient for batteries in approximately 500,000 electric vehicles. Commercial lithium production is targeted to begin in 2028.

The company plans to advance development in the Schleidberg area with further drilling to secure additional production and injection wells. Investors can expect the next formal updates with the quarterly activities report on January 30, 2026, followed by the annual report on March 25, 2026.