Xstate Resources Begins Drilling at Diona-1, Eyes Key Gas Formations
Xstate Resources has commenced drilling operations at its Diona-1 well in Queensland, targeting promising gas reservoirs with a rapid path to market.
- Drill rig arrived on site 22 September 2025
- Spud scheduled for 26 September 2025 targeting Showgrounds formation
- Primary target at 2,300m with potential to drill to 2,600m
- Project located near existing gas pipeline infrastructure
- Xstate holds 51% interest and operates ATP 2077
Operational Update on Diona-1 Drilling
Xstate Resources Limited (ASX, XST) has officially begun preparations for drilling its Diona-1 well, located in the Diona Block of ATP 2077 within Queensland's Surat-Bowen Basin. The drill rig arrived on site on 22 September 2025, and after a week of assembly and setup, the company plans to spud the well at 5pm Queensland time on 26 September.
Targeting Proven Hydrocarbon Reservoirs
The primary focus of the drilling is the Showgrounds formation at approximately 2,300 metres depth, a proven gas reservoir. Should initial wireline logging confirm promising hydrocarbon presence, drilling will continue deeper to 2,600 metres to test the Tinowon and Wallabella formations, both known for their hydrocarbon potential.
Strategic Location and Market Access
The Diona project benefits from a strategic location between the Silver Springs gas processing facility and the Waggamba gas field. Notably, the well pad is less than 100 metres from the Waggamba to Silver Springs gas pipeline, offering a potentially rapid route to market if commercial quantities of gas are discovered. This proximity could significantly reduce time and costs associated with bringing production online.
Partnership and Operational Control
Xstate holds a 51% working interest in ATP 2077 and operates the drilling program, having acquired its stake from Elixir Energy Limited, which retains full ownership of adjacent blocks. Managing Director Andrew Bald praised the professionalism of the drilling team and expressed optimism about the upcoming results, highlighting the swift mobilization and setup of the rig.
Looking Ahead
The drilling of Diona-1 is expected to take 7-8 days to reach the Showgrounds formation, with total depth anticipated within 15 days. Investors and industry watchers will be closely monitoring the wireline log results to gauge the prospectivity of the targeted formations and the potential for commercial development.
Bottom Line?
As drilling progresses, all eyes will be on the initial results that could unlock a fast-track gas opportunity in Queensland.
Questions in the middle?
- Will the Showgrounds formation confirm commercially viable gas quantities?
- What are the estimated costs and capital requirements for further development if successful?
- How soon could production commence given the nearby pipeline infrastructure?