Xstate Resources Secures Diona Project, Targets ASX Re-Quotation and Q3 2025 Drilling
Xstate Resources has acquired a 51% stake in the Diona project, setting the stage for its ASX re-quotation and a planned drilling campaign in the third quarter of 2025. The company is also undertaking a capital raise of at least $1.5 million to support these initiatives.
- Acquisition of 51% working interest in Diona project from Elixir Energy
- Planned capital raise of minimum $1.5 million to facilitate ASX re-quotation
- Maiden drilling program at Diona targeted for Q3 2025
- Disposal of non-cashflow accretive Canadian assets with royalty retained
- Stable production maintained in Austria and California assets
Strategic Acquisition and Re-Quotation Plans
In a decisive move to reinvigorate its portfolio and market presence, Xstate Resources Limited (ASX: XST) has secured a 51% working interest in the Diona block of ATP 2077, previously held by Elixir Energy Limited. This acquisition, announced in early April 2025, is a cornerstone for the company’s strategy to re-comply with ASX Listing Rules and achieve re-quotation of its shares.
The company plans to issue a prospectus targeting a minimum capital raise of $1.5 million, with a requirement to secure at least 300 applications at a minimum parcel size of $2,000. Existing shareholders will be given priority entitlement to half of the maximum raise, underscoring Xstate’s commitment to its current investor base.
Operational Outlook and Drilling Program
Managing Director Andrew Bald highlighted the low technical risk and promising potential of the Diona project, which is located in the Surat Bowen Basin of South-West Queensland. The company has allocated approximately $2.6 million for the maiden drilling program, aiming to commence towards the end of Q3 2025, shortly after re-quotation.
The technical team’s analysis suggests multiple targets with significant potential for both gas and liquids, positioning Diona as a pivotal asset in Xstate’s growth trajectory. Collaboration with Elixir Energy will be critical to expedite the drilling process and maximize operational efficiency.
Portfolio Rationalisation and Production Updates
During the quarter, Xstate disposed of its interests in the Crest Jinn wells in Canada, assets that were not generating positive cash flow. The company retains a 3% overriding royalty on 25% of production from these wells, maintaining some upside exposure without operational burdens.
Production from existing assets remained stable, with the Anshof project in Austria delivering 1,295 barrels net to Xstate in the March quarter, down slightly from the previous quarter. In California, gas production net to Xstate was 2,023 thousand cubic feet, reflecting a modest decrease but consistent operational activity. Notably, leases associated with the Alvares project in California expired, but this is not expected to materially impact the company’s portfolio.
Financial Position and Leadership Changes
At quarter’s end, Xstate held a cash balance of A$3.276 million, a slight decrease attributed mainly to legal and technical fees related to the Diona acquisition. The company’s cash runway is estimated to cover over 12 quarters at current expenditure levels, providing a solid financial foundation for upcoming activities.
Leadership adjustments include the appointment of Andrew Bald as Managing Director, focusing on the re-quotation process and drilling program execution. Concurrently, Andrew Childs transitioned to a non-executive Chairman role, signaling a refreshed governance structure aligned with the company’s strategic priorities.
Looking Ahead
Xstate Resources is positioning itself for a transformative phase, leveraging the Diona project to re-establish its ASX listing and catalyse growth through exploration success. The coming months will be critical as the company finalizes its capital raise, navigates regulatory compliance, and advances its drilling program, all under new executive leadership.
Bottom Line?
Xstate’s acquisition and re-quotation plans mark a pivotal step, but the success of its capital raise and drilling campaign will define its next chapter.
Questions in the middle?
- Will Xstate successfully complete its $1.5 million capital raise to support the Diona drilling program?
- What are the detailed geological prospects and commercial potential of the multiple targets identified at Diona?
- How will the market respond to Xstate’s re-quotation and operational progress in the coming quarters?
