Xstate’s Diona-1 Well Shows Early Gas and Condensate Flow in Initial Testing

Diona-1 Well Enters Flow-Back Phase with Gas and Condensate

Xstate Resources (ASX:XST) has confirmed that its Diona-1 exploration well in Queensland’s Surat-Bowen Basin is now flowing gas and condensate during the initial flow-back and clean-up phase. The well was stimulated across the Permian net gas pay and completed with sliding sleeve tubing, and the workover rig has been demobilised to make way for well testing equipment. This early production of hydrocarbons, alongside stimulation fluids, marks a positive start to the testing program.

Upcoming Testing to Focus on Production Rates and Pressure Monitoring

In the coming days, Xstate expects the gas and condensate to displace the remaining stimulation and completion fluids, allowing the production stream to flow through measurement equipment. This will initiate a multi-rate and pressure monitoring phase, critical for assessing the well’s commercial potential and reservoir characteristics. Managing Director Andrew Bald described the progress as "very encouraging," highlighting the company’s anticipation to better understand Diona-1’s capabilities.

Strategic Positioning in ATP2077 and Partnership with Elixir Energy

The Diona-1 well sits within ATP2077 Diona sub-block, where Xstate holds a 51% interest alongside Elixir Energy Limited (ASX:EXR), which retains 49%. This update follows earlier milestones including methane detection during flowback and the completion of stimulation activities, which were critical steps in moving toward extended flow testing. The well’s progress builds on the company’s previous operational updates and capital raising efforts aimed at advancing the project’s development and potential pipeline connection.

Notably, the well’s stimulation and initial gas flow come after Xstate’s recent successful stimulation of all Diona-1 well zones and a $1.69 million capital raise intended to fund extended testing and infrastructure work, including pipeline connections. These developments collectively underpin Xstate’s strategy to unlock value from the Surat-Bowen Basin gas resources.

Technical Oversight and Resource Reporting Standards

The technical information in this update has been reviewed by Non-Executive Director Greg Channon, a petroleum geologist with over 40 years’ experience. Channon confirms the resource estimates and technical data conform to industry standards, including the Society of Petroleum Engineers’ Petroleum Resources Management System. This independent oversight adds credibility to the operational progress and resource assessments shared by Xstate.