Elixir Energy Drills Longest Lateral with 1,033m Gas Pay in Taroom Trough

Record Lateral and Rich Reservoirs Unveiled at Lorelle-3H

Elixir Energy (ASX:EXR) has pushed the boundaries of the Taroom Trough with the Lorelle-3H appraisal well, drilling a 4,477-metre measured depth including a 1,157-metre horizontal lateral, the longest yet in the basin. The horizontal section, fully within the primary Tinowon ‘Dunk’ Sandstone reservoir, revealed an impressive 1,033 metres of high-quality net gas-condensate pay, exceeding prior expectations with average porosity of 11.2% and peaks up to 18%. This lateral homogeneity and continuity could reshape resource recovery models and future well designs in the basin.

The vertical pilot hole, Lorelle-3, confirmed multiple Permian reservoirs with a combined 148 metres of net gas-condensate pay across four formations, including 60 metres in the Lorelle Sandstone and 59 metres in the Kianga Group. These results underpin the basin’s multi-zone potential and support Elixir’s strategic appraisal plans.

Seismic Survey and Testing Contracts Advance Development

Complementing the drilling success, Elixir completed a 225-kilometre 2D seismic survey in ATP2057 on schedule and budget, targeting highly prospective western Taroom Trough acreage geologically aligned with Lorelle-3/3H. This survey bolsters the company’s data foundation for further resource delineation and farm-in commitments.

Halliburton has secured the stimulation contract for Lorelle-3H, with Enserve/SLB handling production testing. The fracture stimulation program is set to begin in early June following extensive R&D logging and coring, designed to optimise fracture design and maximise productivity. These operations align with Elixir’s 'fast follower' strategy, leveraging proven service providers active in the region.

Strong Financial Position Supports Aggressive 2026 Program

Elixir ended the quarter with $22.3 million in liquidity, combining $14.26 million cash and $8.05 million undrawn from a $10 million debt facility arranged with Endpoints Capital. This facility, secured against the approved R&D program linked to the Lorelle-3 well, allows access to up to 80% of the estimated FY26 R&D tax refund, smoothing working capital during peak operational activity.

The company has completed the bulk of its 2026 capital program, including drilling, seismic acquisition, and preparatory work for stimulation and production tests. Additionally, Elixir holds $26 million in-the-money options expiring in October 2026, which could provide further funding if exercised. Directors have shown confidence through substantial on-market share purchases during the quarter.

Advancing East Coast Gas Supply Amid Market Pressures

Elixir’s progress coincides with the Queensland Government’s active promotion of the Taroom Trough as a key undeveloped source of East Coast oil and gas amid fuel and energy shortages exacerbated by global conflicts and domestic underinvestment. Government officials recently joined Elixir and other operators to highlight the urgency of developing the basin, which is also attracting new entrants like Tri-Star and Beach Energy.

Wallumbillia benchmark gas prices softened to around $10.35/GJ over the quarter, reflecting local supply-demand dynamics distinct from LNG market spikes. This pricing environment underscores the structural shortfall in East Coast gas supplies and the strategic opportunity for Elixir and peers to fill this gap. The company is also preparing for stimulation and testing of the nearby Diona-1 well, with operations scheduled to start in late April and potential for rapid tie-in to existing pipeline infrastructure, possibly generating early cash flow.

Elixir’s recent activities build on its ongoing efforts to assess infrastructure options, including a partnership with APA Group to study pipeline routes to the Wallumbilla Gas Hub, a critical step towards commercialisation and market access.