Xstate Resources reports smooth progress at its Diona-1 well in Queensland, completing stimulation and preparing for a 14-day flow test after detecting methane gas during flowback.
- Successful stimulation of all Diona-1 well zones
- Methane gas detected during flowback period
- Completion underway with coil tubing milling plugs
- 14-day flow testing and pressure monitoring imminent
- Project located in Surat-Bowen basin, Queensland
Diona-1 Well Nears Critical Flow Testing Phase
Xstate Resources Limited (ASX:XST) has reported steady progress at its Diona-1 well in the Surat-Bowen basin, with all target zones successfully stimulated and the operation moving into the next phase of flow testing. The company confirmed that stimulation equipment is being demobilised following completion of the stimulation program, marking a key operational milestone.
During the routine flowback period immediately after stimulation, Xstate recorded indications of methane gas using a handheld meter. While the announcement did not quantify the methane levels, the detection confirms the presence of hydrocarbons and sets the stage for more detailed analysis during the upcoming flow test. This development follows earlier updates where Xstate secured funding to support extended testing and pipeline connection, highlighting the ongoing momentum at Diona-1 Diona-1 stimulation program.
Completion and Testing Preparations Underway
The company is currently using a coil tubing unit to mill out temporary plugs installed during stimulation, a necessary step before running the well completion. Following this, a 14-day flow testing and pressure monitoring program will commence, designed to evaluate the well’s production potential and reservoir characteristics in detail.
These tests are pivotal for Xstate as they will provide clarity on the commercial viability of the Diona project, which was acquired in April 2025. The project holds significant promise, with previous reports estimating prospective resources of around 200 billion cubic feet of gas. This operational update aligns with Xstate’s strategic focus on advancing the Diona asset after divesting its Californian interests to sharpen its Queensland portfolio gas potential at Diona-1 and Xstate Sheds Californian Assets.
Environmental and Market Implications
The detection of methane during flowback, while expected in gas wells, carries environmental and regulatory significance. Methane is a potent greenhouse gas, and its management during testing and production phases will be closely watched by regulators and investors. Xstate’s forthcoming pressure monitoring will also help assess reservoir integrity and inform environmental safeguards.
Market participants will be keen to see the results of the flow testing, which will influence Xstate’s valuation and potential development plans. The company’s managing director, Andrew Bald, and competent person Greg Channon, a seasoned geoscientist, have both endorsed the technical disclosures, lending confidence to the operational transparency.
Bottom Line?
The upcoming flow test results at Diona-1 will be a crucial indicator of Xstate’s ability to commercialise its Queensland gas asset amid environmental scrutiny.
Questions in the middle?
- What methane concentrations will flow testing reveal, and how might they affect environmental compliance?
- Will the 14-day flow test confirm the commercial viability suggested by earlier resource estimates?
- How will Xstate leverage the Diona-1 results to attract further investment or partnerships?