Elixir Energy reports promising hydrocarbon results from the Lorelle-3 pilot well in Queensland’s Taroom Trough, confirming multiple significant reservoirs and setting the stage for imminent horizontal drilling and flow testing.
- Four substantial Permian hydrocarbon reservoirs confirmed with 148m net pay
- Tinowon ‘Dunk’ Sandstone identified as primary target for horizontal drilling
- Secondary reservoirs show thick, high-quality gas pay zones
- Multi-stage fracture stimulation and flow testing planned for Q2 2026
- Results support potential maiden Reserve booking and accelerated appraisal
Strong Initial Results from Lorelle-3
Elixir Energy Limited (ASX: EXR) has delivered encouraging early results from its Lorelle-3 pilot well, located in the ATP2056 permit within Queensland’s Taroom Trough. The well’s wireline logging and core analysis have confirmed four significant Permian sandstone reservoirs, collectively offering 148 metres of net hydrocarbon pay. This includes the primary target, the Tinowon ‘Dunk’ Sandstone, which hosts a gas-condensate resource and is now the focus of imminent horizontal drilling operations.
Multiple Reservoirs with Promising Characteristics
The detailed evaluation revealed the Tinowon ‘Dunk’ Sandstone with 28 metres of net pay and porosities up to 13%, consistent with nearby Shell-operated wells known for commercial gas and condensate flows. Secondary targets such as the Lorelle Sandstone and Kianga Group sandstones also showed substantial net pay thicknesses of 60 metres and 59 metres respectively, with porosities reaching as high as 17%. These secondary reservoirs, particularly the Lorelle Sandstone, exhibited thick, laterally consistent gas zones, highlighting the scale and quality of the resource potential beyond initial expectations.
Next Steps: Horizontal Drilling and Flow Testing
Following the completion of the pilot hole evaluation, Elixir plans to cement the existing wellbore section and immediately commence a horizontal sidetrack exceeding 1,000 metres into the Tinowon ‘Dunk’ reservoir. This will be followed by multi-stage fracture stimulation and flow testing scheduled for the second quarter of 2026. The objective is to demonstrate commercial flow rates of gas and condensate, which could underpin Elixir’s maiden Reserve booking and validate the broader development potential of its Taroom Trough acreage.
Strategic Significance in the Taroom Trough
Lorelle-3 is the first well drilled outside Shell’s core operating area on the upper western flank of the Taroom Trough, confirming the northward extension of the Dunk play. This success reinforces Elixir’s position as the largest acreage holder in the region, which is geologically analogous to Canada’s prolific Montney Formation. The proximity to established gas infrastructure and LNG export facilities in Queensland further enhances the commercial attractiveness of the project.
Outlook and Market Implications
Elixir’s Managing Director Stuart Nicholls emphasised the importance of these results in accelerating appraisal activities and optimising stimulation designs. The company’s ability to secure a substantial refund through the Federal Government’s Research and Development Tax Incentive also supports the economic viability of the program. Investors will be watching closely as the horizontal drilling and flow testing phases unfold, which will be critical in converting contingent resources into reserves and advancing the Taroom Trough towards commercial development.
Bottom Line?
Elixir’s upcoming horizontal drilling and flow tests at Lorelle-3 will be pivotal in unlocking the Taroom Trough’s commercial gas potential.
Questions in the middle?
- Will the horizontal drilling confirm commercial flow rates as anticipated?
- How will the results from secondary reservoirs influence the overall resource valuation?
- What timeline can investors expect for potential Reserve booking and development decisions?