Elixir Energy has secured a $16.6 million capital injection led by Omega Oil and Gas, propelling its high-impact Lorelle-3 appraisal well drilling and expanding contingent gas resources in Queensland’s Taroom Trough.
- Omega Oil and Gas acquires 19.43% stake via $16.6M capital raise
- Lorelle-3 well drilling underway with expanded horizontal sidetrack program
- Taroom Trough 2C Contingent Resources increased by 189 BCFe to ~2.8 TCFe
- 15-year retention licence secured for ATP2044 with no relinquishment
- Data sharing agreement with QGC (Shell) for 3D seismic over ATP2077 Block-A
Capital Raise and Strategic Momentum
Elixir Energy Limited has fortified its financial position with a $16.6 million capital raise, highlighted by Omega Oil and Gas Limited acquiring a 19.43% stake. This strategic investment not only institutionalises Elixir’s shareholder base but also accelerates the company’s Phase-2 Strategic Plan focused on defining maiden reserves in the Taroom Trough, Queensland.
The capital injection has enabled Elixir to expand its drilling program for the Lorelle-3 appraisal well, transitioning from a vertical pilot hole to include a horizontal sidetrack with multi-stage fracture stimulation and flow testing. This expanded scope aims to demonstrate commercial flow rates and potentially convert contingent resources into reserves.
Progress on Lorelle-3 and Resource Upgrades
Drilling operations at Lorelle-3 are underway, with the well having reached measured depth milestones and commenced casing and cementing. The well is positioned near Shell’s successful Dunk-1 well, offering a prime opportunity to validate Elixir’s acreage value. The program benefits from a federal Research and Development Tax Incentive, potentially refunding up to 48.5% of eligible costs, estimated at around $9.7 million.
Alongside drilling progress, Elixir reported an 8% increase in its 2C Contingent Gas Resources within the Taroom Trough, adding 189 billion cubic feet equivalent (BCFe) to reach approximately 2.8 trillion cubic feet equivalent (TCFe). This resource upgrade underscores the basin’s potential and Elixir’s growing footprint.
Licence Security and Collaborative Data Sharing
Elixir secured a 15-year retention licence (PCA356) over ATP2044 without any partial relinquishment, a significant milestone ensuring uninterrupted tenure over 1,058 square kilometres of prospective acreage. This retention includes 1,362 BCFe of independently certified 2C Contingent Gas Resources from the Daydream-2 well.
Further enhancing its exploration capabilities, Elixir entered a data sharing and ingress agreement with QGC Pty Ltd, a Shell subsidiary, facilitating the acquisition of 3D seismic data over ATP2077 Block-A. This collaboration will provide Elixir with high-resolution seismic insights critical for high-grading future appraisal wells, including the planned Daydream-3 well.
Upcoming Catalysts and Market Context
Looking ahead, Elixir anticipates completing and testing the Diona-1 well, which has confirmed significant net gas pay and is positioned for a multistage stimulation and flow test. Its proximity to existing pipeline infrastructure offers a pathway to early production and cash flow generation.
The regional gas market remains robust, with benchmark spot prices near $14 per gigajoule, reinforcing the demand for new supply sources. While the Federal Government’s proposed domestic gas reservation scheme introduces some uncertainty, Elixir’s large, undeveloped Taroom Trough resource base positions it well to navigate evolving market dynamics.
With approximately $21 million in cash at quarter-end and further inflows from the capital raise, Elixir is well-funded to execute its strategic objectives through 2026, including drilling, testing, and seismic acquisition programs.
Bottom Line?
Elixir’s strengthened financial footing and expanded drilling program set the stage for potentially transformative results in the Taroom Trough this year.
Questions in the middle?
- Will the horizontal sidetrack at Lorelle-3 confirm commercial flow rates to convert contingent resources into reserves?
- How will the Federal Government’s domestic gas reservation scheme impact Elixir’s development timeline and investment appetite?
- What insights will the upcoming 3D seismic data from QGC provide to refine Elixir’s exploration and appraisal strategy?