Elixir Energy Advances Testing at Diona-1 Well in Queensland

Stimulation and Testing Commence at Diona-1

Elixir Energy (ASX:EXR) has begun rigging up stimulation equipment at the Diona-1 well site, setting the stage for imminent three-zone fracture stimulation. This operation targets the measured Permian net gas-condensate pay zones, with subsequent completion and flow testing to follow shortly. The company anticipates that these tests could confirm a more westerly extent of the Taroom Trough, potentially broadening the gas resource footprint and enhancing the prospectivity of the Diona sub-block.

Strategic Location Near Established Infrastructure

Diona-1 sits strategically between the Silver Springs Gas Plant and the Waggamba gas field within the Surat-Bowen Basin, with the Waggamba to Silver Springs gas pipeline less than 100 metres from the well pad. This proximity offers a rapid path to market if flow testing confirms commercial viability, as the pipeline connects directly to the Wallumbillia Gas Hub, the key pricing point for eastern seaboard gas sales. The well’s location underscores Elixir’s broader strategy to leverage existing infrastructure in the Taroom Trough, where it holds the largest acreage position.

Potential to Increase Resource Base and Prospectivity

The Diona-1 well targets three distinct zones of gas-condensate pay within over-pressured Permian sands, reservoir units known for successful production within the Taroom Trough. Flow testing and pressure monitoring will provide critical data to assess whether the well lies inboard of the western edge of the Taroom Trough, a finding that would materially increase Elixir’s resource potential. Success here could add a sizable portion of the 375 square kilometre Diona sub-block to Elixir’s resource portfolio, complementing its existing contingent resources estimated at around 3.5 trillion cubic feet (TCF).

Joint Venture and Funding Context

Elixir holds a 49% interest in the ATP2077 Diona sub-block joint venture, with Xstate Resources Limited owning the majority 51%. Notably, Elixir was fully carried for the drilling of Diona-1 by Xstate, reflecting a strategic partnership that shares both risk and reward. This operational update comes on the heels of Elixir’s recent successful appraisal drilling and strong liquidity position, following the company’s record lateral drilling and $22 million liquidity, which primes it for continued development activity across its Taroom Trough acreage.

Next Steps and Market Implications

Following fracture stimulation and well completion, Elixir expects to commence flow back, production, and pressure monitoring tests within approximately a week. The results will be pivotal in defining the commercial potential of the Diona sub-block and could influence the company’s resource estimates and development timeline. This operational phase aligns with broader efforts to appraise and commercialise the Taroom Trough, which includes ongoing pipeline feasibility work to connect production to the Wallumbilla Gas Hub, as highlighted in recent assessments with APA Group. The Diona-1 testing thus represents a critical juncture in Elixir’s strategy to convert contingent resources into reserves and advance towards production.