Elixir Energy Mobilizes Shell-Backed Rig for High-Stakes Lorelle-3 Well
Elixir Energy has secured a specialized rig imported by Shell to drill the pivotal Lorelle-3 appraisal well in Queensland’s Taroom Trough, with operations set to begin in January 2026. This move aims to validate Elixir’s substantial gas resources adjacent to Shell’s acreage.
- Contract signed with Helmerich & Payne for FlexRig3 MM 648
- Rig mobilization scheduled for January 12, 2026
- Site preparation 30% complete at Lorelle-3 well pad
- Well targets Permian sandstone reservoirs near Shell’s Dunk-1 site
- Eligible for up to 48.5% government tax refund on drilling costs
Strategic Rig Contract and Site Progress
Elixir Energy Limited has formalized a contract with Helmerich & Payne to deploy the FlexRig3 MM 648, a rig specifically imported by Shell for its Taroom Trough drilling campaign, to drill the Lorelle-3 appraisal well. This rig, known for its efficiency demonstrated in similar Australian basins, marks a significant operational milestone for Elixir as it prepares to unlock the potential of its acreage in Queensland’s Bowen Basin.
Site preparation is well underway, with civil works and well pad construction already 30% complete. The rig is slated to mobilize to the site starting January 12, 2026, with drilling expected to commence shortly thereafter, signaling the start of a critical phase in Elixir’s exploration program.
High-Impact Well Targeting Proven Reservoirs
The Lorelle-3 well, located within ATP2056 where Elixir holds a 50% stake and operatorship, is planned to reach a depth of 3,600 meters. It will focus on Permian sandstone formations analogous to those successfully penetrated by Shell’s Dunk-1 well just 10 kilometers away. This proximity to Shell’s best results offers a promising opportunity to validate the quality of Elixir’s contiguous acreage.
The well’s expanded evaluation program includes coring and logging to provide comprehensive data on the basin-centered gas play, which could significantly enhance Elixir’s resource valuation. The company’s Managing Director Stuart Nicholls emphasized the strategic advantage of drilling adjacent to Shell’s operations, positioning Lorelle-3 as potentially transformative for the Taroom Trough’s development trajectory.
Financial Incentives and Market Context
Elixir stands to benefit from substantial government incentives, with up to 48.5% of eligible well costs refundable through federal tax incentives and research development tax credits. This financial support mitigates some of the capital risk associated with high-impact appraisal drilling.
The Taroom Trough itself is a geologically significant basin, often compared to Canada’s prolific Montney Formation, and is advantaged by proximity to major gas infrastructure including the Wallumbilla Gas Hub and LNG export facilities. Elixir’s 2.8 trillion cubic feet of independently certified contingent gas resources underscore the strategic importance of this drilling campaign.
Looking Ahead
As Elixir prepares to drill Lorelle-3, the market will be watching closely for results that could confirm the basin’s commercial potential and validate Elixir’s acreage adjacent to Shell’s core operations. Success here could accelerate development plans and reshape the competitive landscape in Queensland’s onshore gas sector.
Bottom Line?
Lorelle-3’s drilling will be a defining test for Elixir’s Taroom Trough ambitions and a key market catalyst in 2026.
Questions in the middle?
- Will Lorelle-3 confirm reservoir quality comparable to Shell’s Dunk-1 well?
- How might drilling results impact Elixir’s resource valuation and development timeline?
- What operational risks could affect the January 2026 mobilization and drilling schedule?
