Lorelle-3 Well to Benefit from Nearly Half of Costs Covered by Federal R&D Incentive

Federal Backing for a High-Impact Well

Elixir Energy Limited has secured a significant financial advantage for its Lorelle-3 appraisal well, slated to spud in January 2026 within Queensland’s Taroom Trough. The well has qualified for an Advance Finding under the Australian Government’s Research and Development Tax Incentive program, enabling Elixir to claim up to 48.5% of eligible costs related to drilling, coring, logging, analysis, completion, and testing over three financial years.

This government support is a critical enabler for Elixir, allowing the company to confidently plan and finance the well’s operations. By combining the tax incentive with new lending facilities, Elixir aims to bring forward the funding required for this high-stakes exploration campaign.

Strategic Importance of Lorelle-3

The Lorelle-3 well is positioned to be one of the most consequential wells in the Taroom Trough in 2026. Located approximately 10 kilometres from Shell’s Dunk-1 well, which encountered a high-quality reservoir, Lorelle-3 will be the first well drilled outside Shell’s acreage on the basin’s upper western flank. Success here could validate Elixir’s extensive acreage as comparable in quality to Shell’s, potentially reshaping the valuation of the region’s gas resources.

Elixir’s Managing Director Stuart Nicholls highlighted that the expanded evaluation program accompanying the well will generate valuable geological insights. These data will inform a scientific approach to stimulation and testing, crucial for proving the presence of the Basin Centred Gas Play, a model that, if confirmed, could dismiss less optimistic geological scenarios and enhance the prospectivity of Elixir’s holdings.

Resource Potential and Market Position

ATP2056, where Lorelle-3 is located, contains independently certified contingent gas resources of over 1,000 billion cubic feet equivalent. While these resources remain un-risked and classified as development unclarified, the well’s success could unlock significant value. Elixir is the largest acreage holder in the Taroom Trough, a basin geologically analogous to Canada’s prolific Montney Formation and advantaged by proximity to major gas infrastructure and export facilities.

The company has secured Shell’s approval to use a heavy-duty drilling rig imported specifically for this campaign, underscoring the operational readiness and scale of the project. The combination of federal funding, strategic partnerships, and a robust resource base positions Elixir to potentially redefine the gas landscape in Queensland’s Bowen Basin.

Looking Ahead

As Elixir prepares to drill Lorelle-3, the market will be watching closely for results that could validate a basin-defining gas play. The financial structuring around the R&D tax incentive and lending facilities not only mitigates upfront capital risk but also signals confidence in the project’s potential. The coming months will be pivotal in determining whether Lorelle-3 can deliver on its promise and catalyse further development in the Taroom Trough.