Xstate Resources Strikes Promising Basin Centred Gas at Diona-1 Well
Xstate Resources has successfully re-listed on the ASX and drilled the Diona-1 well in Queensland, revealing a significant overpressured gas column that could accelerate gas sales by mid-2026.
- Successful ASX re-quotation following $2.14m capital raise
- Diona-1 well drilled to 2,479m with Basin Centred Gas indications
- Prospective resource estimate significantly upgraded
- Gas sales targeted for first half of 2026
- Corporate leadership changes with new Non-Executive Chairman appointed
Re-listing and Capital Raise
After a period of suspension, Xstate Resources Limited (ASX, XST) resumed trading on 16 September 2025, buoyed by a successful capital raising of approximately $2.14 million. This financial boost was timely, enabling the company to swiftly commence drilling operations at its flagship Diona project in Queensland.
Diona-1 Well Drilling and Findings
Just eleven days post re-listing, Xstate spudded the Diona-1 exploration well targeting a low-risk anticlinal structure within the Surat-Bowen Basin. The well reached a final depth of 2,479 meters, passing through key formations including the Wallabella and basement layers. While no hydrocarbons were detected in the Showgrounds Sandstone, wireline logging revealed a substantial gas column across the Bandanna, Tinowon, and Wallabella formations.
Basin Centred Gas Potential
The gas column is overpressured and notably free of water, characteristics indicative of a Basin Centred Gas play. This discovery prompted a reassessment and significant upgrade of the prospective resource estimate, suggesting a much larger project than initially anticipated. The proximity of the Diona well to existing pipeline infrastructure, less than 100 meters from the Waggamba to Silver Springs gas pipeline, positions the project for a potentially rapid path to market.
Outlook and Corporate Developments
Managing Director Andrew Bald expressed optimism that flow testing will confirm the commercial viability of the well, with gas sales possibly commencing in the first half of 2026. On the corporate front, the company appointed Greg Channon as Non-Executive Chairman, with Andrew Childs transitioning to a Non-Executive Director role, signaling a refreshed leadership team to guide the next phase of growth.
Financial Position and Future Funding
Despite operational outflows totaling nearly $2 million during the quarter, Xstate ended September with a healthy cash balance of $2.417 million. The company has since secured an additional $3.82 million through a placement announced at the end of October, underpinning its commitment to advancing the Diona project and supporting ongoing exploration activities.
Bottom Line?
With Basin Centred Gas potential unlocking new value, Xstate’s next challenge lies in proving commercial flow and scaling production.
Questions in the middle?
- Will flow test results confirm the commercial viability of the Diona-1 well?
- How will the upgraded resource estimate impact Xstate’s valuation and investor sentiment?
- What are the timelines and capital requirements for transitioning from exploration to production?
