Elixir Energy has reached a key milestone by drilling and casing the heel of its Lorelle-3H well in Queensland’s Taroom Trough, setting the stage for horizontal drilling aimed at unlocking commercial gas flow.
- Heel of Lorelle-3H well drilled and cased into Tinowon ‘Dunk’ Sandstone
- SLB optimisation study guides horizontal drilling placement
- Over 1,000 metres of horizontal well planned for multi-stage fracture stimulation
- Flow testing scheduled by end-June 2026 to demonstrate commercial gas and condensate flow
- Project benefits from up to 48.5% refund via Australian R&D Tax Incentive
Milestone Achieved in Lorelle-3H Drilling
Elixir Energy Limited (ASX: EXR) has successfully drilled and cased the heel section of its high-impact Lorelle-3H appraisal well, penetrating the overlying coal seams and reaching the primary target, the Tinowon ‘Dunk’ Sandstone, in Queensland’s Taroom Trough. This achievement marks a significant de-risking event, clearing the way for the commencement of horizontal drilling operations designed to maximise reservoir contact and productivity.
Optimised Horizontal Drilling Strategy
Guided by a detailed Horizontal Landing Optimisation Study conducted by SLB, Elixir has identified the optimal zone within the 28 metres of net pay in the Dunk Sands to place the horizontal wellbore. This precision targeting aims to enhance stimulation effectiveness and improve reservoir drainage, critical factors in unlocking the commercial potential of the Basin Centred Gas Play.
Next Steps: Drilling, Stimulation, and Testing
Elixir has commenced drilling the horizontal section with a 6-1/8” directional drilling assembly equipped with logging-while-drilling tools to collect reservoir data and guide the well path. The plan is to drill over 1,000 metres of horizontal wellbore before casing and cementing the section. Following this, a multi-stage fracture stimulation and flow testing program is scheduled to take place by the end of June 2026. The goal is to demonstrate commercial flow rates of gas and condensate, which could pave the way for converting contingent resources into reserves.
Strategic Position and Industry Context
Lorelle-3H is positioned on the northern extension of Shell’s primary operational area within the Taroom Trough, a basin geologically analogous to Canada’s prolific Montney Formation. Elixir’s substantial acreage in this region benefits from proximity to established infrastructure including the Wallumbilla Gas Hub, multiple pipelines, and LNG export facilities. The well’s promising petrophysical results validate the quality and materiality of Elixir’s resource position.
Financial Incentives and Project Outlook
The qualifying activities associated with the Lorelle-3H well; covering drilling, coring, logging, completion, stimulation, and testing; are eligible for a significant refund of up to 48.5% under the Australian Federal Government’s Research and Development Tax Incentive. This financial support enhances the project’s economics as Elixir advances towards demonstrating commercial viability in the Taroom Trough.
Bottom Line?
As Elixir moves into horizontal drilling and prepares for flow testing, the next few months will be pivotal in confirming the commercial potential of its Taroom Trough acreage.
Questions in the middle?
- Will the upcoming flow tests confirm commercial gas and condensate production rates?
- How might the results impact Elixir’s resource classification and valuation?
- What are the broader implications for development timelines and capital expenditure?