Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has provided a Queensland operations update covering its Taroom Trough and broader Surat–Bowen Basin activities, confirming it will resume operatorship of the Diona-1 permit upon JV formalisation and is planning multi-stage stimulation and production testing for execution this quarter. For Lorelle-3, Elixir has agreed terms to use the H&P FlexRig 648 — specifically imported by Shell for its Taroom Trough appraisal — secured land access and long-lead items with civil works to commence shortly, and locked in the high-impact appraisal well for drilling in January 2026.
“It’s an exciting period for Elixir Energy as we prepare for flow testing at Diona-1 later this quarter, followed by the spudding of the high-impact Lorelle-3 appraisal well," Elixir Energy managing director & CEO Stuart Nicholls said. "We’re delighted to have secured terms with Helmerich & Payne and Shell for the use of their newly imported heavy-duty FlexRig3 Rig 648 — world-class equipment that reinforces the calibre of our upcoming campaign.
"Positioned strategically within Shell’s Taroom development corridor, we’re targeting the same geological formations and depths that have delivered their recent success. By leveraging comparable high-quality equipment and subsurface understanding, we’re confident of demonstrating continuous play potential across the permit boundary.
"With the largest acreage position in Queensland’s Taroom Trough and more than 100 kilometres of linear exposure to this proven play, Elixir is exceptionally well placed to validate and unlock the significant resource potential of this exciting basin.”
Diona-1 update
Following the last operational update, the rig has been released from the Diona-1 well site. Xstate Resources Limited (ASX:XST) has fulfilled its carry obligations under the transaction terms, and the joint venture has now been formalised, with Elixir Energy resuming operatorship and holding a 49% interest in the Diona sub-block of ATP 2077.
Elixir has moved into design and planning for completion, stimulation and production testing. Procurement of key equipment and services indicates the program could move into execution this quarter.
The company plans to stimulate and test each zone of net gas pay identified on wireline logs, and to separately complete and test the lower Wallabella Sandstones — partially logged by logging-while-drilling tools — which present additional upside.
Subject to successful flow testing, Diona-1 is a strong candidate for rapid tie-in and early production, aided by the nearby Waggamba–Silver Springs pipeline (less than 100 metres from the wellhead) and an above-ground tie-in point under 1,000 metres from the location.
Drilling at Diona-1 satisfies the major work commitments for the broader ATP 2077 permit. Elixir has also begun steps to secure its wholly owned Taroom Trough sub-blocks (A & B) under retention licences — Potential Commercial Areas (PCAs) — as outlined in Phase 1 of its strategic plan.
Lorelle-3 appraisal well set for January 2026 spud with Shell-backed rig access
Elixir has also advanced preparations for the high-impact Lorelle-3 appraisal well in the Taroom Trough, targeting a January 2026 spud.
In a notable show of inter-operator cooperation, Shell has approved Elixir to agree terms with Helmerich & Payne (H&P) to use the recently imported H&P FlexRig 3 (Rig 648) for Lorelle-3. Comparable H&P rigs — such as those deployed by Tamboran Resources in the Beetaloo Sub-basin — have delivered material gains in drilling efficiency and execution.
Lorelle-3 is positioned less than 10 kilometres from Dunk-1, the best penetration of the Taroom Trough’s Tinowon “Dunk” Sands, which recorded a 37-metre (100% net-to-gross) interval of near-conventional reservoir quality. It will be the first well outside Shell’s acreage on the upper western flank of the trough and, on success, would validate the “Shell-like” quality of Elixir’s position. Elixir notes it is the largest net acreage holder in the Taroom Trough.
The site sits on a 2023-vintage seismic line and is supported by a high-amplitude response at the Tinowon/Dunk level — an attribute that has correlated with better reservoir outcomes in nearby Shell wells, including Dunk-1 and Overston-1. The location is also proximate to existing infrastructure, near an above-ground tie-in point on the Waggamba–Silver Springs pipeline and less than 1,000 metres from the Diona-1 wellhead.
Well design and data program
Lorelle-3 is planned to a 3,600-metre total depth with an expanded evaluation program across multiple Permian sandstone targets in the Basin-Centered Gas (BCG) Play. The program includes coring and comprehensive logging aimed at:
- Distinguishing a definitive BCG model from alternative geological interpretations;
- Informing optimal stimulation and production strategies for trapped gas and condensate; and
- Assessing broader implications for the Taroom Trough, including the potential absence of a down-dip water leg — thereby increasing prospectivity for gas-saturated, over-pressured reservoirs in deeper, more central acreage.
Elixir has secured all long-lead items and land access and will commence civils ahead of rig mobilisation. An R&D Advanced Finding submission to support the expanded testing was lodged in August, with acknowledgement and approval expected prior to spud.
On success, Lorelle-3 would be among the highest-impact wells drilled in the Taroom Trough in 2026 and could materially de-risk Elixir’s acreage position.