Lorelle-3 Well Targets 3,600m Depth with 48.5% Tax Refund Incentive
Elixir Energy has commenced drilling at the Lorelle-3 appraisal well in Queensland’s Taroom Trough, targeting significant gas resources with plans for advanced testing by mid-2026.
- Lorelle-3 appraisal well drilling underway using Helmerich & Payne FlexRig 3
- Two-phase drilling targeting Permian sandstone formations including the Dunk member
- Planned multi-stage fracture stimulation and production testing before June 2026
- Eligible for up to 48.5% federal tax incentive refund on well costs
- Well located near Shell’s Dunk-1 well, aiming to validate Elixir’s substantial gas resources
Drilling Commences at Lorelle-3
Elixir Energy Limited (ASX, EXR) has officially started drilling operations at its Lorelle-3 appraisal well, situated in the Taroom Trough of Queensland’s Bowen Basin. The company has mobilised the Helmerich & Payne FlexRig 3 from Brisbane, marking the beginning of a critical campaign to evaluate its substantial contingent gas resources in the region.
The drilling program is structured in two phases. Initially, a pilot hole will be drilled to a depth of 3,600 metres, focusing on collecting core samples and detailed logs across multiple Permian sandstone targets. The primary focus is the Dunk member of the Tinowon Sands, with secondary targets including the Overston and Lorelle Sandstones. This expanded evaluation aims to deepen understanding of the Basin Centred Gas Play’s potential.
Strategic Testing and Resource Validation
Following the pilot hole, Elixir plans to drill a horizontal sidetrack of at least 1,000 metres into the primary target zone. This section will be cased and suspended to facilitate multi-stage fracture stimulation and production testing, scheduled before June 2026. The objective is to demonstrate commercial flow rates of gas and condensate, a crucial step toward converting contingent resources into reserves.
Notably, Lorelle-3 is positioned approximately 10 kilometres from Shell’s Dunk-1 well, the best penetration of the Tinowon ‘Dunk’ Sands in the Taroom Trough. This proximity offers a valuable benchmark and the opportunity to validate Elixir’s acreage quality and the materiality of its resource position outside Shell’s primary area.
Financial Incentives and Regional Advantages
The well’s qualifying activities; including drilling, coring, logging, and testing; are eligible for a significant federal government Research and Development Tax Incentive, potentially refunding up to 48.5% of associated costs. This incentive improves the financial efficiency of the appraisal campaign.
Elixir’s Taroom Trough acreage benefits from strategic proximity to key infrastructure such as the Wallumbilla Gas Hub, multiple pipelines, and nearby LNG export facilities. This logistical advantage enhances the commercial appeal of any successful resource development in the area.
Looking Ahead
As drilling progresses, Elixir has committed to keeping shareholders informed at key milestones, including casing completions and the start of logging operations. The outcomes of the fracture stimulation and flow testing will be pivotal in shaping the company’s next steps and its potential role in Queensland’s onshore gas industry.
Bottom Line?
Lorelle-3’s results will be a defining moment for Elixir’s Taroom Trough ambitions and the broader Queensland gas sector.
Questions in the middle?
- Will the fracture stimulation confirm commercial flow rates to justify reserve conversion?
- How will Lorelle-3’s results influence Elixir’s valuation and future capital allocation?
- What impact might this appraisal have on regional gas supply dynamics and infrastructure utilisation?
