Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has secured an AusIndustry Advance Finding for its planned Lorelle-3 appraisal well in ATP2056, in Queensland’s Taroom Trough, paving the way for substantial refunds under the Federal Government’s Research & Development (R&D) Tax Incentive.
The determination confirms that qualifying activities tied to Lorelle-3 — including drilling, coring, logging, analysis, completion and testing — are eligible for refunds covering up to 48.5% of eligible costs. The program can apply across up to three financial years, providing clearer visibility on cost recovery for the appraisal campaign ahead of a planned January 2026 spud.
The ruling gives Elixir confidence to arrange new lending facilities to accelerate access to anticipated refunds, effectively bringing forward a portion of the projected R&D benefit to support project funding and cash flow. The company noted that EY assisted with the application.
An Advance Finding is designed to give companies pre-approval on the eligibility of their proposed R&D activities, reducing uncertainty around rebate claims. For Elixir, the confirmation means a material share of Lorelle-3’s qualifying expenditure can be clawed back through the tax system, partially de-risking the cost base of the well.
Lorelle-3 is described by the company as a high-impact appraisal well targeting the Taroom Trough, with the R&D determination covering a defined list of technical workstreams integral to the program. Further operational detail, including final budgets and financing arrangements, is expected as the spud date approaches.
Key points
- Timing: Lorelle-3 is due to spud in January 2026.
- Scope: Eligible activities include drilling, coring, logging, analysis, completion and testing.
- Refund size: The R&D program can refund up to 48.5% of eligible costs through regular tax return processes.
- Duration: Coverage applies for up to three financial years.
- Funding strategy: With the Advance Finding in place, Elixir plans to establish new lending facilities to bring expected refunds forward.
- Adviser: EY supported Elixir’s application to AusIndustry.
“The financial support secured for the drilling and testing of this well via the Federal Governments R&D incentive program, when combined with the planned lending facilities, provides a critical source of capital required for the drilling, completion and testing of the high impact Lorelle-3 appraisal well," Elixir Energy managing director and CEO Stuart Nicholls said.
"The data gathered from the expanded evaluation program to support the R&D will lead to significant geological knowledge gains in the exciting Taroom Trough and will also allow for a scientific and methodical approach to designing the optimal stimulation and testing program. Lorelle-3 has the chance to be a basin-defining outcome for the Taroom Trough and Elixir’s significant acreage position.”
About Lorelle-3
The Lorelle-3 appraisal well in ATP2056 (Taroom Trough, Queensland) is a 50:50 joint venture, with Elixir operating the Lorelle-3 well and Santos (ASX: STO) to operate the permit thereafter. The well is planned to a total depth of about 3,600 metres and will undertake an expanded evaluation program, including coring and comprehensive wireline logging, across Permian sandstone targets within the basin-centred gas (BCG) play.
The workstream is designed to generate the data required to test whether a true BCG system is present — versus alternative geological models — and to inform optimal stimulation and production strategies for trapped gas and associated condensates. A conclusive BCG interpretation would have wider implications for the Taroom Trough, potentially discounting the presence of a downdip water leg and improving the prospectivity of deeper, more central acreage.
Lorelle-3 is positioned to be one of the higher-impact wells drilled in the Taroom Trough in 2026. It sits roughly 10 kilometres from Shell’s Dunk-1, which intersected a 37-metre interval of high-quality reservoir in the Tinowon “Dunk” sands. It will also be the first well on the upper western flank drilled outside Shell-held acreage. Positive logging and test results at Lorelle-3 would help validate the quality of Elixir’s nearby ground; the company is the largest net acreage holder in the trough.
Shell has cleared Elixir to finalise terms with Helmerich & Payne for the heavy-duty H&P FlexRig 3 (Rig 648), with spudding targeted for January 2026. ATP2056 contains a net 1,057 BCFe of 2C contingent gas resources, independently certified by Sproule ERCE.