Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has identified three zones of net gas pay totalling 23 metres in its Diona-1 exploration well in Queensland’s Surat-Bowen Basin — a result that managing director Stuart Nicholls says could mark a key step towards gas production and cashflow generation.
The discovery was made within the Permian section of ATP2077’s Diona sub-block, where the Bandanna, Black Alley, Tinowon and Wallabella formations returned encouraging results.
Promising indications across key formations
Wireline logging confirmed multiple gas-charged reservoir zones observed earlier in mud logs and Logging While Drilling (LWD) data. The breakdown includes:
- Bandanna/Black Alley formations: 13 metres of net gas pay with an average porosity of 11%.
- Tinowon Sandstone: 1 metre of net pay with 11% porosity.
- Wallabella Sandstone: 9 metres of net pay with 8% porosity, with further potential upside identified by LWD tools in the lower section.
In total, the logging recorded 23 metres of net gas pay across 116 metres of gross pay, with average porosity of around 10%. The zones appear confined within each formation, which may support a simplified stimulation and completion strategy.
Although well control challenges prevented full wireline data acquisition over the lowest Wallabella interval, early indications suggest additional pay could be confirmed during flow testing, the company said.
Testing strategy and next steps
Elixir and its joint venture partner, Xstate Resources Limited (ASX:XST), have run and cemented 7-inch casing to total depth of 2,479 metres. The partners will now finalise a completion and flow-testing program designed to evaluate each of the three main gas zones.
The program is expected to involve individual perforation, stimulation, and production testing, likely to be followed by co-mingled testing to measure pressures, fluid samples, and permeability — data that will inform potential resource upgrades and future production plans.
Fast-track to market potential
Located between the Silver Springs Gas Plant and Waggamba gas field, Diona-1 sits less than 100 metres from the Waggamba pipeline and around 1 kilometre from an above-ground tie-in point.
That infrastructure connects directly to the Wallumbilla Gas Hub — the main spot-pricing hub for eastern Australian gas — giving Elixir a potentially rapid route to market if flow testing proves successful.
“The initial results at Diona-1 are incredibly encouraging and indicate a new gas discovery, which may be confirmed via production testing,” Nicholls said.
“Should the follow-on testing go well, Diona-1 presents as a candidate to take Elixir into gas production and cashflow generation via the nearby tie-in point, placing Elixir in a unique position.”
Elixir holds a 49% interest in the Diona sub-block, with Xstate holding 51%.