Elixir Energy’s Funded Three-Phase Plan Targets Taroom Trough Production by 2027
Elixir Energy has unveiled a strategic, fully funded plan to develop its extensive gas resources in Queensland’s Taroom Trough, aiming for initial production by late 2027. The company leverages its dominant acreage position alongside Shell’s operations and a fast-follower approach to unlock multi-TCF reserves.
- Three-phase strategy focused on acreage retention, reserve certification, and early production
- Largest acreage holder in Taroom Trough with 2.6 TCFe 2C contingent resources
- Phase 1 fully funded, including drilling of Diona-1 and Lorelle-3 wells and seismic acquisition
- Strategic proximity to Wallumbilla Gas Hub and low-impurity gas reduces development costs
- Collaboration with major operators like Shell enhances project maturity and value
Strategic Vision for Taroom Trough
Elixir Energy Limited (ASX: EXR) has laid out a comprehensive three-phase strategic plan aimed at advancing its position in Queensland’s Taroom Trough, a region rapidly gaining attention for its multi-trillion cubic feet (TCF) gas resources. The plan, announced in May 2025, is designed to secure long-term tenure, prove commercially viable reserves, and initiate early production by late 2027.
At the heart of Elixir’s strategy is a fast-follower approach, leveraging the significant investment and development activity led by industry giant Shell. This positions Elixir to benefit from the maturation of the basin-centred gas and tight gas sand plays, while managing capital prudently through staged milestones.
Dominant Acreage and Resource Base
Elixir commands the largest net acreage in the Taroom Trough, covering over 2,000 square kilometers adjacent to Shell’s primary permits. This extensive position encompasses diverse plays including basin-centred gas, tight gas sands, and light oil. The company has independently certified 2.6 trillion cubic feet equivalent (TCFe) of 2C contingent resources, underpinned by successful flow tests such as the Daydream-2 well, which demonstrated gas flows exceeding 2.8 million standard cubic feet per day.
The Taroom Trough’s strategic location near the Wallumbilla Gas Hub and multiple pipelines feeding the undersupplied East Coast gas market enhances the commercial appeal. Additionally, the region’s low-impurity gas and proximity to LNG liquefaction facilities and refineries offer cost advantages and flexible monetisation options.
Phased Development with Clear Milestones
Elixir’s three-phase plan begins with securing long-term retention of its acreage through targeted drilling and seismic programs, including the upcoming Diona-1 and Lorelle-3 wells and 2D seismic acquisition. Phase 1 is fully funded, supported by a farmout agreement with Xstate Resources for Diona-1 drilling.
Phase 2 focuses on proving commercial reserves in a well-defined area known as Block-A, with plans for vertical and horizontal drilling, enhanced seismic data acquisition, and a farmout campaign to support horizontal well development. Success here would enable Elixir to certify 2P reserves and move closer to production readiness.
Phase 3 envisages early production operations through collaboration with other operators, aiming to generate initial cash flows from small-scale developments. The company emphasizes disciplined capital deployment, operational improvements, and cost reductions to enhance shareholder value.
Market Context and Outlook
The Taroom Trough is emerging as a critical new supply source amid Australia’s East Coast gas supply crunch. With LNG export capacity near Gladstone and a high-demand domestic market, unlocking this multi-TCF resource is strategically important. Shell’s ongoing investment and appraisal activity lend external validation and momentum to the play.
Elixir’s management team, led by CEO Stuart Nicholls, is focused on operational discipline and capital efficiency, aiming to navigate the technical and commercial challenges inherent in unconventional gas development. The company’s upcoming webinar will provide further insights into the strategic plan and invite investor engagement.
Bottom Line?
Elixir’s methodical, funded approach in the Taroom Trough sets the stage for a potential new gas supply source by 2027, but execution risks and capital requirements remain key watchpoints.
Questions in the middle?
- Will Elixir secure the necessary capital to advance beyond Phase 1 and certify 2P reserves?
- How will operational learnings from Daydream-2 influence upcoming drilling and testing?
- What impact will Shell’s continued development have on Elixir’s farmout and production timelines?
