Elixir Energy Advances Taroom Trough Gas Resources with $16.6 Million Capital Raise

Taroom Trough Emerges as Strategic Energy Asset

Elixir Energy (ASX:EXR) has delivered a transformative year in its quest to unlock the Taroom Trough’s vast gas and condensate potential, a region that is fast gaining recognition as a cornerstone for Australia’s energy security. The company’s pivot from its Mongolian ventures to this Queensland basin is now paying dividends, with a 32% uplift in independently certified 2C contingent gas resources, lifting total resources to approximately 3.5 trillion cubic feet equivalent (TCFe).

Non-Executive Chairman Richard Cottee, drawing on decades of experience pioneering coal seam gas projects, likened the Taroom Trough’s potential to a “CSG Mark II” for Queensland, highlighting its low capital and operating costs and proximity to existing LNG infrastructure. This endorsement comes amid growing political momentum, with the Queensland Government allocating $19 million in the 2026–27 State Budget towards a Fuel Security Plan focused on the basin.

Operational Milestones Drive Resource Growth

FY26 saw Elixir drill and test three wells: Diona-1, Lorelle-3, and the Lorelle-3H appraisal well. The latter delivered particularly encouraging results after a 12-stage, 6-million-pound fracture stimulation campaign executed by Halliburton. Lorelle-3H achieved peak gas flows of 10.4 million standard cubic feet per day (mmscfd) with associated condensate production, averaging 6.2 mmscfd over an hour, and demonstrated excellent gas quality with minimal CO2 and a high ethane and propane content. The well’s gas composition meets pipeline specifications with no need for processing beyond dehydration.

Following stimulation, the well underwent a 30-day cleanup phase, recovering 34% of the injected stimulation fluid, significantly higher than offset wells, indicating effective fracture placement and promising productivity. Elixir plans a 60-day soak period before retesting Lorelle-3H to optimise flow rates and gather further data for reserve booking and development planning.

Meanwhile, the Diona-1 exploration well confirmed 23 meters of net gas pay across three Permian formations. Although flow testing revealed challenges in fluid recovery and sustained gas flow, the joint venture is exploring artificial lift options to unlock the resource’s potential in the coming year.

Strategic Partnerships and Capital Strength

Elixir’s operational progress was underpinned by a $16.6 million capital raise supported by Omega Oil and Gas Limited, which acquired a 19.43% stake through a two-tranche placement. Omega, a fellow player in the Taroom Trough, brings not only capital but also strategic alignment with other major shareholders such as Ilwella and TriStar, reinforcing Elixir’s position as the largest net acreage holder in the basin with ~2,000 km² of permits.

This capital injection has enabled Elixir to advance Phase 2 of its Strategic Plan, including pursuing 100% retention of its acreage and preparing for maiden reserve bookings. The company also secured a $10 million debt facility via the Federal Government’s Research and Development Tax Incentive program, reflecting confidence in its innovative exploration and appraisal activities.

Infrastructure and Market Access Initiatives

Recognising the importance of market connectivity, Elixir signed an Early Works Agreement with APA Group to investigate pipeline options for a notional 40 terajoule per day (TJ/d) Lorelle pilot project. The study is assessing the feasibility of pipeline routes to the Wallumbilla Gas Hub, a critical gas trading and interconnection point in Queensland. This work is vital for progressing toward production and reserve certification.

Elixir is also expanding its seismic data footprint, acquiring 225 km of high-resolution 2D seismic in ATP2057 and collaborating with QGC (Shell) to access 3D seismic data over key areas. These geophysical efforts aim to de-risk future appraisal drilling and resource upgrades, particularly in the northern blocks of the permit.

Financial Position and Outlook

Elixir reported a net loss of $3.7 million for FY26, a significant improvement from the previous year’s $41.2 million loss, which included a $38 million impairment related to the divestment of Mongolian assets. The company ended the year with $8.4 million in cash and undrawn debt, bolstered by capital raises and the receipt of R&D tax incentives.

Looking ahead, Elixir has raised an additional $5 million post-year-end to fund ongoing flow testing at Lorelle-3H, artificial lift trials at Diona-1, and to initiate a strategic review of its Taroom Trough assets. This review aims to explore avenues such as farm-outs, partnerships, or self-funding to maximise shareholder value.

With a seasoned leadership team, including Managing Director Stuart Nicholls and a strong board featuring industry veterans like Cottee and Kelemen, Elixir is navigating the complexities of basin-centred gas development with a clear focus on operational execution and strategic growth.