Elixir Energy Confirms Recoverable Gas at Diona-1 Well

Diona-1 Well Confirms Material Gas Discovery

Elixir Energy (ASX:EXR) has officially classified its Diona-1 well as a discovery after confirming a recoverable, overpressured Permian gas and condensate resource in Queensland’s Surat-Bowen Basin. The well, drilled vertically in the ATP2077 Diona sub-block, met its key exploration objectives including low impurity hydrocarbons with zero CO2 and H2S, aligning with a Basin Centered Gas system in the Taroom Trough.

This confirmation extends the western boundary of the Taroom Trough, increasing Elixir’s net acreage by 184 square kilometres to a commanding 548,000 net acres; the largest position in the play. The Diona sub-block’s inclusion bolsters Elixir’s strategic footprint in a basin advantaged by proximity to major gas infrastructure and export hubs.

Flowback Progress and Operational Challenges

The Diona-1 well remains in the flowback and cleanup phase, having recovered 45% of the injected stimulation fluids. Gas production has been sustained throughout, with the produced gas flared at surface and measured as virtually free of impurities. However, fluid recovery has slowed, with intermittent incremental returns indicating the reservoir’s permeability and energy are sufficient but constrained by back pressure from remaining fluids.

Elixir’s onsite team has been actively managing choke and flow settings to stimulate fluid recovery, a strategy that has yielded some success. The joint venture is now evaluating artificial lift options to accelerate this process, anticipating that once 50-60% of stimulation fluids are recovered, the reservoir will naturally flow more freely, boosting gas production rates. This operational nuance highlights the technical complexity of transitioning from exploration to commercial flow.

Strategic Implications and Next Steps

With the Diona-1 well situated less than 100 metres from the Waggamba gas pipeline, which connects to the Silver Springs Gas Plant and ultimately the Wallumbillia Gas Hub, there is a potential for rapid commercialisation if sustained production is achieved. Elixir is concurrently modelling horizontal drilling scenarios to optimise flow rates and recoverable volumes across the enlarged Taroom Trough acreage.

The joint venture plans to secure an independently certified Contingent Resource booking for the Diona sub-block, formalising the resource’s commercial potential. This follows earlier flow testing milestones at Diona-1, including the initial gas flow confirmation reported last week, which demonstrated encouraging pressure and condensate presence initial gas flow confirmation. The ongoing operational updates reflect Elixir’s methodical approach to unlocking value from this emerging play.

Elixir’s Managing Director Stuart Nicholls emphasised the significance of the discovery and the proximity to infrastructure, noting the well’s unoptimised vertical status and the prospect of improved production once back pressure eases. This measured optimism is consistent with the company’s recent progress in the Taroom Trough, where it has also drilled record lateral wells and secured funding for further development record lateral well and funding.