Diona-1 Well Hits 1,130m, Targets 12.5 Bscfe in Queensland Basin
Xstate Resources reports steady progress on its Diona-1 well in Queensland, confirming its majority ownership of ATP 2077 and targeting multiple proven gas reservoirs with promising potential.
- Xstate’s 51% ownership of ATP 2077 officially registered
- Diona-1 well drilling reached 1,130 metres and progressing on schedule
- Showgrounds formation expected to be intersected by early October
- Targets three proven hydrocarbon reservoirs between 2,300m and 2,600m
- Proximity to existing gas pipeline offers rapid market access potential
Ownership Milestone Secured
Xstate Resources Limited has solidified its position in the Surat-Bowen Basin with the official registration of its 51% interest in ATP 2077 as of 29 September 2025. This strategic acquisition from Elixir Energy Limited not only grants Xstate operational control but also places it at the forefront of exploration in a region known for its hydrocarbon potential.
Drilling Progress on Track
The company’s flagship well, Diona-1, located within the Diona Block of ATP 2077, has reached a depth of approximately 1,130 metres, with drilling proceeding smoothly at a rate of about 60 metres per hour. The use of the Ventia 101 rig has contributed to maintaining the forecast timeline, with expectations to reach the top of the Showgrounds formation, the first primary target, by early October.
Targeting Multiple Reservoirs
Diona-1 is designed to test three proven hydrocarbon reservoirs – the Showgrounds, Tinowon, and Wallabella formations, situated between 2,300 and 2,600 metres deep. These formations are part of a low-risk anticlinal structure with promising stratigraphic traps, enhancing the prospectivity of the well. With an estimated 55% chance of geological success and gross unrisked prospective resources of 12.5 billion standard cubic feet equivalent, the well represents a compelling risk-reward scenario for Xstate.
Strategic Location for Market Access
One of the standout advantages of the Diona project is its proximity to existing infrastructure. The well pad lies less than 100 metres from the Waggamba gas export pipeline, with a valve tie-in point about one kilometre away. This close access could enable rapid commercialisation should the well confirm commercially viable hydrocarbon volumes, potentially accelerating Xstate’s path to market.
Looking Ahead
Following the intersection of the Showgrounds formation, Xstate plans to conduct wireline logging and mudlogging to evaluate the reservoir. Decisions on casing and whether to proceed to deeper targets will follow, marking critical next steps in the drilling campaign. The company’s management and drilling teams have earned commendations for maintaining momentum, underscoring operational competence in this pivotal phase.
Bottom Line?
As Diona-1 approaches key formations, Xstate’s next moves will be closely watched for signs of a breakthrough in Queensland’s gas landscape.
Questions in the middle?
- Will the Diona-1 well confirm commercial quantities in all three targeted formations?
- How soon could Xstate move to production if the well proves successful?
- What impact will this project have on Xstate’s broader portfolio and valuation?
