Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has intersected a significant overpressured gas column at its Diona-1 exploration well in Authority to Prospect 2077 (Diona sub-block), Surat-Bowen Basin, Queensland, after reaching 2,479 metres (m) of measured depth.
Elixir is fully carried on Diona-1 by Xstate Resources Limited (ASX:XST) under an earlier transaction.
The Diona prospect sits between the Silver Springs Gas Plant and Waggamba gas field, with proximity to the Waggamba–Silver Springs pipeline — less than 100 metres from the well pad — providing potential for a rapid path to market if successful.
Equity interests in the Diona sub-block are EXR 49% and XST 51%.
“The Diona-1 well has proven the presence of (moveable) hydrocarbons across an unanticipated 180m+ (gross) column of the Permian section of this well. We cannot rule out that Diona-1 has intersected the updip edge of the Taroom Basin Centred Gas play, which, if present, could offer us the opportunity to prove up a significantly larger unconventional resource," XST managing director, Andrew Bald said.
"The strategy of targeting a multi-stacked play has paid dividends and early signs are that this could be a remarkable outcome for the team and the Company. It is a credit to the geologists and geophysicists who have identified the opportunity. We are all very excited and looking forward to seeing the outcome of the wireline logging.”
Permian-aged hydrocarbon-bearing reservoirs
The well drilled through the primary Triassic Showgrounds Sandstone target — described as well-developed but non-hydrocarbon bearing — and into a 181 m Permian-to-Basement hydrocarbon-prone sequence that included an overpressured gas column and a kick requiring higher mud weights and gas circulation.
Preliminary logging-while-drilling data indicate several Permian-aged hydrocarbon-bearing reservoirs warranting further logging and testing. Drilling will complete before a wireline logging campaign and final interpretation.
“The presence of overpressured gas throughout the Permian sequence including through the secondary targets is positive for the Diona-1 well,” Elixir managing director and chief executive officer Stuart Nicholls said.
“The acquisition of additional information from Diona-1 is critical for the declaration of a discovery which could have material regional impacts across the known plays in the area. We are excited to complete the program and commence interpretation of the significance of these results.”
About Xstate Resources
Xstate Resources has spudded its first well at the Diona project in Queensland, with Diona-1 commencing on 27 September 2025.
The company is focused on oil and gas exploration and holds a 51% interest in Authority to Prospect (ATP) 2077. Elixir Energy Limited (ASX: EXR) retains 100% beneficial ownership of Blocks A and B within the permit area.
Beyond Australia, Xstate also holds exploration assets in the Sacramento Basin, California.