Elixir Energy Ltd (ASX:EXR) has executed an information-sharing agreement with Origin Energy ahead of the upcoming spud of its Daydream-2 well at the Grandis Gas Project in Queensland’s Taroom Trough.
Origin is in the process of being awarded a greenhouse gas (GHG) licence, which overlaps Elixir’s Grandis Gas Project, or ATP 2044. This licence facilitates Origin’s plans to investigate carbon capture and storage (CCS) in this area.
Origin will gain important subsurface data in regards to CCS as Elixir’s upcoming Daydream-2 well will intersect formations of potential interest for Origin’s CCS activities.
Adding to the anticipated R&D tax credits from the Federal Government, the agreement provides Elixir with a further $1 million in non-dilutive financing plus costs.
“It is Elixir’s firm view that the co-location of natural gas and CCS (and renewables) – forming what Wood Mackenzie has dubbed 'Energy Super Basins' - will increasingly form key areas of interest for global energy investors,” said Elixir managing director Neil Young.
"Win-win-win"
The information-sharing agreement between Elixir and Origin therefore provides for:
- Elixir to gather information for Origin, which it would otherwise need to drill its own well to obtain.
- Origin to compensate Elixir for this by paying for all incremental costs in gathering this information.
- In addition, Origin will pay Elixir a further amount of $1 million.
- Origin has the option to enter into similar arrangements in up to five future wells Elixir will drill in ATP 2044.
“We are very pleased to announce another non-dilutive source of finance for Daydream-2 (after the R&D tax credits that will come from the Federal Government).
"This innovative deal provides a great win-win-win for Elixir, Origin – and the State of Queensland – in that one well will provide subsurface data that would otherwise require two wells,” said Young.