Elixir Energy has completed stimulation at its Diona-1 well in Queensland’s Surat-Bowen Basin, observing encouraging gas indications ahead of flow testing. The well’s proximity to major pipeline infrastructure could accelerate commercialisation if results hold.
- Stimulation of Diona-1 well completed with gas observed
- Milling and completion underway before flow testing
- Diona-1 located near Waggamba gas pipeline for rapid market access
- Elixir holds 49% interest in ATP2077 Diona sub-block JV
- Flow testing results pending to confirm commercial potential
Stimulation Complete with Encouraging Gas Indications
Elixir Energy (ASX:EXR) has wrapped up fracture stimulation at its Diona-1 exploration well in Queensland’s Surat-Bowen Basin, reporting positive hydrocarbon presence during the flowback phase. The stimulation spread was successfully deployed across all targeted zones, with equipment now demobilised. The observation of gas alongside return fluids during flowback bodes well for the upcoming flow testing phase, which will be critical to assessing the well’s commercial viability.
The well is part of the ATP2077 Diona sub-block joint venture, where Elixir holds a 49% stake and Xstate Resources Limited (XST) the remaining 51%. XST fully funded the drilling program as part of a 2025 transaction, with Elixir carried through the drilling phase. This operational update confirms progress following the earlier announcement of stimulation commencement and testing plans at Diona-1, which is seen as a potential expansion opportunity within the broader Taroom Trough gas play. The well’s location adjacent to the Waggamba to Silver Springs gas pipeline offers a strategic advantage for rapid market access if flow testing confirms commercial flow rates, reinforcing the basin’s infrastructure benefits noted in prior coverage of the region’s development dynamics three-zone fracture stimulation underway.
Completion and Flow Testing Next Steps
Following stimulation, milling operations are nearing completion with the coiled tubing unit finalising its work. The rig will soon be mobilised to run the production completion equipment. Once installed, Elixir will commence flow testing and pressure monitoring to evaluate reservoir performance and gas deliverability. These results will be pivotal in determining the well’s contribution to the company’s contingent gas resources and the potential timeline for commercial production.
Elixir’s Taroom Trough acreage, where Diona-1 sits, is one of the largest contiguous gas resource areas in Queensland, with independently certified contingent resources approaching 3.5 trillion cubic feet. This positions the company as a significant player in an emerging gas hub advantaged by proximity to the Wallumbilla Gas Hub, multiple pipelines, and LNG export infrastructure. The operational progress at Diona-1 complements other appraisal and development activities in the basin, including the recently completed Lorelle-3/3H well and ongoing pipeline feasibility studies with APA Group, highlighting a coordinated push towards commercialisation Lorelle-3H well drilled 4,477m.
Strategic Location Offers Rapid Market Access Potential
Diona-1’s location is particularly noteworthy, situated less than 100 metres from the Waggamba gas pipeline with an above-ground tie-in point approximately one kilometre from the well pad. This proximity could facilitate a swift pathway to market, reducing infrastructure lead times and capital requirements if the well produces commercial volumes. The pipeline connects to the Silver Springs Gas Plant and onward to the Wallumbilla Gas Hub, the eastern seaboard’s key gas pricing point, underscoring the strategic value of the site within Queensland’s gas supply chain.
While the stimulation results are promising, the upcoming flow testing phase remains the critical hurdle. The company’s forward-looking statements appropriately caution that actual production rates and commercial outcomes are subject to operational and market risks. Investors will be watching closely as Elixir advances through this testing phase, which could materially influence the valuation and development timeline of its Surat-Bowen Basin assets.
Bottom Line?
Flow testing at Diona-1 will be the true test of commerciality, with the well’s prime infrastructure access offering a rare chance for rapid gas market entry.
Questions in the middle?
- Will flow testing confirm sustainable commercial gas flows at Diona-1?
- How might successful results impact Elixir’s resource conversion and development timeline?
- What role will the nearby Waggamba pipeline play in accelerating production start-up?