Elixir Energy Ltd earlier this week discussed the advancement of its ATP 2077 project, highlighting a farm-out agreement with Xstate Resources and confirming a fully funded drilling schedule for 2025.
Highlights
- Elixir Energy was awarded ATP 2077 in Queensland, which includes three blocks—two in the Taroom Trough.
- A shallower block has been farmed out to Xstate Resources, who will earn a 50% interest by funding the Diana-1 well.
- Diana-1 is near underutilised infrastructure and could be rapidly commercialised if successful.
- The gas price at the nearby Wallumbilla Hub is around $14.
- The deal satisfies Elixir’s license commitment without cost to the company.
- Elixir retains 100% of the strategic Taroom Trough blocks and has begun booking contingent resources.
- Two fully funded wells are planned for 2025: Diana-1 (funded by Xstate) and Laurel-3 (in partnership with Santos).
- The Taroom Trough region is attracting interest from large international companies.
Quick to monetise if successful
Elixir said the agreement covers a shallow block within the ATP 2077 license, which was awarded last year by the Queensland Government. Xstate will earn a 50% interest by funding the Diana-1 well, due to be drilled in the third quarter.
Elixir Energy retains full ownership of the two deeper blocks located in the Taroom Trough, which host a significant unconventional gas play. The company told investors the farm-out satisfies its work program commitment without any expenditure.
Diana-1 is situated near existing gas infrastructure and is only a few hundred metres from a gathering line currently owned by AGL. Elixir highlighted that, in the case of success, the well could be monetised quickly and at low cost.
The company pointed to gas pricing at the nearby Wallumbilla Hub, which it said is currently around AUD 14 per gigajoule. It suggested that policy measures to reduce prices lacked credibility, indicating the outlook remains favourable for producers.
Elixir noted that initial contingent resources have already been booked in the Taroom Trough, and said that both its own activity and that of neighbouring operators have helped de-risk the area.
Looking ahead, Elixir confirmed two fully funded wells in 2025: Diana-1 and the Laurel-3 well, the latter to be delivered in partnership with Santos. The company said these represent different resource types, balancing short-term cash flow potential with long-term growth.