Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) entered the September 2025 quarter with strong operational momentum, marking key progress across its Queensland gas assets. The period was defined by drilling success at Diona-1 — where wireline logs confirmed 23 metres of net gas pay across three Permian formations — and by advancement toward the high-impact Lorelle-3 appraisal well, set to spud in January 2026 using the H&P FlexRig 648 under an agreement facilitated with Shell.
Highlights
- Diona-1 drilled and logged with 23 m net gas pay (avg ~10% porosity) across three Permian formations; EXR has resumed operatorship and is preparing for completion and production testing.
- Terms agreed to use H&P FlexRig 648 for Lorelle-3, with land access and long-lead items secured; spud targeted for January 2026.
- Quarter-end cash $5.4m and R&D receivable $3.8m (net cash + receivables $9.2m).
“The last quarter was marked by initial successes at Diona-1 and substantial progress on Phase-1 of our Strategic Plan. Elixir Energy is poised for a highly active period with flow testing at Diona-1 scheduled this coming quarter and the high impact Lorelle-3 appraisal well to follow shortly after," managing director and CEO Stuart Nicholls said.
"Our collaboration with Shell for the use of the H&P FlexRig3 Rig 648 brings premium drilling capability to our program. Neatly tucked into Shell’s Taroom bow wave, our operations target the same proven formations that have delivered strong results nearby.
"With the largest acreage position in the Taroom Trough and extensive exposure to the play, Elixir is well positioned to confirm continuity and unlock significant value for shareholders.”
Potential Commercial Area application
Elixir reported steady execution in the Taroom Trough, Queensland. At ATP2044 (100%), the company progressed its Potential Commercial Area application covering the whole permit and expects an ~$3.8m R&D refund in the coming quarter, a milestone tied to Phase-1 objectives.
Across ATP2056/2057 (50% and operator for farm-in), preparations for the Lorelle-3 appraisal well advanced materially.
Shell approved EXR’s use of H&P FlexRig 648; EXR has secured land access and long-lead items and will commence civils ahead of mobilisation. Lorelle-3 is planned to ~3,600 m, with cores and logs over key Permian targets to test the basin-centred gas (BCG) model and guide stimulation and production design.
At ATP2057, EXR progressed access for ~200 km of 2D seismic targeted for late Q1 CY26 and awarded the acquisition to Terrex Seismic.
In ATP2077 A & B (100%), EXR digitised historic well logs (Kinkabilla-1, Inglestone-1) and engaged ERCE-Sproule to evaluate a potential contingent resource booking, with work expected to conclude in the following quarter.
Shell support
Regulatory filings by Shell in August 2025 show updated 3D seismic design lines extending into ATP2077-A and ATP2056 toward Lorelle-3, underscoring activity near EXR’s acreage.
At the ATP2077 Diona sub-block (49%; operator), Diona-1 reached 2,479 metres and wireline logging confirmed three net pay zones: Bandanna/Black Alley (13 m), Tinowon (1 m), and Wallabella (9 m), with additional Wallabella pay indicated on LWD not fully captured by wireline. The JV plans to stimulate and test each zone, including a dedicated test of the lower Wallabella.
Based on log interpretation, trapping appears stratigraphic/regional rather than structural. Proximity to existing infrastructure provides early tie-in optionality, with the Waggamba–Silver Springs pipeline <100 m from the wellhead and a surface tie-in <1 km away.
Supportive conditions
Industry conditions were supportive during the quarter:
- Wallumbilla firm spot exceeded $17/GJ and STTM Brisbaneaveraged nearly $13/GJ.
- Nearby, Omega outlined a potential development case (PCA ~1,075 km², up to 418 horizontal wells, indicative 10-yr EUR ~0.95 MMboe or 5.72 Bcf per well) and subsequently raised $46m; Beach entered an AMI with Omega and Tri-Star over ~3,750 km².
Financials
Closing cash was $5.381m (opening $6.581m). Operating outflow $(675)k and capitalised exploration $(525)k drove the movement; estimated funding runway ~4.5 quarters.
Related-party payments totalled $309k (incl. $182k for directors’ compensation; $127k KMP and reimbursements). During the quarter, the MD/CEO acquired 1,108,660 shares on-market.
Outlook
In Q2, EXR intends to execute multi-zone stimulation and flow testing at Diona-1 (including the lower Wallabella).
Civils and mobilisation for Lorelle-3 are scheduled to deliver a January 2026 spud, with results aimed at validating the BCG model and informing commercialisation pathways.
Planning for ATP2057 seismic continues toward a late Q1 CY26 acquisition window.