Xstate gains preferred status for promising Taroom gas acreage

Xstate-led venture targets new Taroom acreage

Xstate Resources Limited (ASX:XST) has been named preferred tenderer for Block 7 in Queensland’s Taroom Trough, adding a sizeable new exploration position to its gas-focused portfolio. The approximately 305 square kilometre block sits between Condamine and Miles on the Western Downs, on the eastern flank of the Taroom Trough.

Xstate will initially operate the venture, with Amplitude Energy, Betaloo Energy and Eastern States Energy each holding a 25% working interest. The equal ownership structure gives the ASX-listed company an operating role while sharing the exploration position with three industry partners.

Prospective geology near active exploration

The acreage lies within the Surat over Bowen Basin and is described as prospective for stacked Permian reservoir intervals associated with the Basin Centred Gas play. Xstate also points to the block’s proximity to pipeline infrastructure and services, as well as its position adjacent to and along trend with Omega Oil & Gas’s Canyon play, which is currently being drilled and appraised.

The company says recent exploration in the Taroom Trough has identified basin-centred gas alongside associated liquids and light crude oil. Those are geological prospects rather than disclosed reserves or production outcomes: the announcement provides no resource estimate, drilling result, development timetable or financial forecast for Block 7.

Licence grant remains conditional

Preferred tenderer status is not the same as a completed licence grant. Xstate said it is undertaking the remaining Queensland Government processes, including initiating a Native Title process and lodging an Environmental Authority. The initial work commitment is expected to focus on seismic processing and early geological and geophysical activities.

That gives the project a defined next step, but not yet a commercial result. The key milestones are completion of the government processes, the final grant conditions and the quality of information generated by the early seismic and geological work. Until then, Block 7 remains an exploration opportunity whose value depends on what the subsurface data and subsequent appraisal can establish.