Gas Supply Risks Loom as Elixir Pushes Forward with Farmout Talks

Quarterly Operational Highlights

Elixir Energy has concluded operations at its Daydream-2 appraisal well, marking a significant milestone in its Grandis Gas Project located in Queensland. The well demonstrated promising flow rates from the Lorelle Sandstone formation, stabilizing between 2.1 and 2.5 million standard cubic feet per day (MMSCFD). This data underpins Elixir's recent booking of an additional 712 billion cubic feet (Bcf) of prospective resources for ATP 2077, reinforcing the project's potential scale.

Alongside operational progress, Elixir has executed a memorandum of understanding with the Australian Gas Infrastructure Group (AGIG) to address new gas infrastructure needs in the Taroom Trough, a strategic move to facilitate future gas transport and market access.

Market Context and Strategic Positioning

The macro environment for the Grandis Gas Project is increasingly favourable. East Coast gas prices have risen to approximately A$14 per gigajoule (GJ), with expectations to sustain or exceed this level. Elixir highlights that previous government interventions have inadvertently tightened supply, pushing prices higher. The imminent arrival of international gas imports via Squadron Energy's Floating Storage Regasification Unit (FSRU) at Port Kembla in 2026 is poised to introduce LNG at around A$20/GJ, potentially resetting the market's marginal pricing.

However, Elixir points out a critical supply risk in 2025, before these imports commence. Peak demand periods, especially during cold snaps in southern states, may outstrip local supply capacity, exacerbated by infrastructure constraints. The Australian Competition and Consumer Commission (ACCC) has underscored these challenges, noting the southern states’ increasing reliance on imports and Queensland's pivotal role in domestic supply.

Farmout Negotiations and Project Development

Elixir is actively engaged in farmout discussions for both its Australian Grandis Project and the Nomgon CBM PSC in Mongolia. These negotiations are described as well advanced but remain open, reflecting the company's strategy to leverage partnerships for capital and operational support. Concurrently, planning for the next appraisal well in the Grandis Project is underway, signaling continued commitment to resource delineation and development.

In Mongolia, production testing at the Nomgon Pilot Project continues with ongoing de-watering efforts, although critical desorption pressure has yet to be reached. Elixir is also reassessing its renewable energy assets in the region, exploring opportunities to support local mining and grid customers with cleaner energy solutions.

Financial Position and Governance

Financially, Elixir reported a net cash position of approximately $6.4 million at quarter-end, bolstered by a $7.9 million Research & Development (R&D) tax refund received during the period. The company spent $3.8 million on exploration activities, primarily focused on the Daydream-2 well. No capital raisings occurred this quarter, and there were no changes to the board or management team.

Elixir continues to emphasize its commitment to environmental, social, and governance (ESG) principles, maintaining safe operations without environmental incidents and supporting local communities through initiatives such as multi-year tree planting programs in Mongolia.