Elixir Energy Boosts Taroom Trough Gas Resources by 24 Percent with Lorelle-3H Progress

Lorelle-3H Flow Testing Nears Completion with Strong Gas and Condensate Rates

Elixir Energy (ASX:EXR) has successfully completed a complex 12-stage, 6-million-pound fracture stimulation at its Lorelle-3H appraisal well in ATP2056, Queensland's Taroom Trough. The stimulation targeted the Tinowon 'Dunk' sandstone reservoir, placing 100% of proppant within the formation and confirming effective permeability pathways through multiple pressure tests.

The well underwent a controlled drawdown, producing clean stimulation fluid with no sand or proppant detected, an encouraging sign of fracture integrity. Gas breakthrough occurred at a bottom hole pressure just below reservoir pressure, with peak flow rates reaching 3 million standard cubic feet per day (mmscfd) of low-impurity gas containing less than 1% CO2 and no H2S. Condensate samples were also collected for analysis.

Following initial flowback through 4.5-inch casing, Elixir installed a 2-3/8-inch tubing string to stabilise surging flows and enable uniform single-phase production. The well has produced back 32% of injected stimulation fluids, a high recovery rate compared to offset wells, indicating excellent reservoir connectivity. The flow testing program is in its final phase, with results expected imminently. This progress builds on earlier reports of sustained dual phase flow and fluid recovery during clean-up operations Lorelle-3H recovers 32% stimulation fluid.

New Contingent Gas Resources Certified at ATP2057

On the western flank of the Taroom Trough, Elixir’s farm-in permit ATP2057 saw a significant upgrade with independent certifier Sproule ERCE booking 662 billion cubic feet equivalent (BCFe) of new 2C Contingent Gas Resources, inclusive of 5 million barrels of condensate. This addition lifts Elixir’s total 2C Contingent Gas Resources in the Taroom Trough Basin Centred Gas Play by 24% to approximately 3.5 trillion cubic feet equivalent (TCFe).

The resource estimate is based on recent fast-track processing of a 225-kilometre 2D seismic survey (Teelba seismic) and regional well data, including Elixir’s own Lorelle-3/3H results. ATP2057 contains two historical wells that penetrated the Permian stratigraphy, supporting the geological model. More than half of the permit remains upside potential for further resource certification with future drilling.

Diona-1 Well Shows Promise but Needs Artificial Lift

In ATP2077, the Diona-1 exploration well underwent a two-stage stimulation and flowback, delivering over-pressured, low-impurity gas flows. However, the well stalled short of the targeted fluid recovery needed for sustained gas flow, with approximately 46% of injected fluid recovered. Elixir paused flow testing to procure artificial lift equipment before resuming operations. Despite challenges, shut-in wellhead pressures indicate the presence of sustained gas flows.

Pipeline Feasibility Study with APA Group Targets Wallumbilla Gas Hub

Elixir and APA Group have executed an Early Works Agreement to assess pipeline routes and feasibility for transporting gas from a proposed 40 terajoule per day (TJ/d) Lorelle pilot project to the Wallumbilla Gas Hub. This hub is a critical wholesale trading point linking Queensland’s Surat and Bowen Basins to east coast domestic and LNG export markets.

The study compares capital and operating costs, approvals, and timelines for pipelines running either 25 kilometres due north or 50 kilometres northwest to Wallumbilla. The outcome will inform potential reserves booking and project development planning. Elixir also plans separate studies for optimising transport of associated condensate to Queensland refineries.

Financial Position and Market Environment

Elixir completed its 2026 capital program, ending the quarter with $11.1 million in liquidity, including $8.4 million cash and $2.7 million undrawn debt under a $10 million R&D financing facility with Endpoints Capital. The company expects a $12 million R&D tax incentive for FY26, which will be used to repay drawn debt and fund future expenditures. An additional $2 million extension to the R&D facility was secured for FY27.

Notably, Elixir’s Managing Director Stuart Nicholls acquired 100,000 shares on market during the quarter, signalling insider confidence. The company also holds approximately 215 million 12c options expiring in October 2026.

Meanwhile, the Queensland Government allocated $19 million in its 2026–27 budget to support fuel security and accelerate development in the Taroom Trough, including $11.9 million for a development plan to coordinate infrastructure and streamline approvals. Regional activity includes Shell’s horizontal drilling and 3D seismic campaigns adjacent to Elixir’s permits, enhancing the basin’s exploration profile.

East coast wholesale gas prices averaged $9.08 per gigajoule (GJ) this quarter, down from $12.36/GJ in Q2 2025, while international LNG spot prices remained elevated amid Middle East supply risks. This price divergence continues to challenge federal gas market interventions.