Omega Oil and Gas Ltd has agreed to invest up to $14.6 million in Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) via a two-tranche placement at $0.041 per share, giving Omega a 19.43% stake in the company on completion. The second tranche of the placement will be subject to Elixir shareholder approval. As a fellow operator in Queensland’s Taroom Trough — where well-known resource investors Ilwella and Tri-Star are substantial shareholders — Omega’s investment is seen by Elixir as a strong validation of the importance, quality and scale of its Taroom Trough acreage position.
In addition to Omega’s commitment, Nero Resource Fund has agreed to invest a further $2 million, also at $0.041 per share, in the conditional tranche-2 placement. This will take total proceeds from the capital raising to approximately $16.6 million. On completion of the raising, Elixir expects to hold an estimated pro-forma cash balance of around $25 million, plus its R&D Advance Finding.
The new funding has enabled Elixir’s board to sanction the transition of the company’s strategic plan into Phase 2. Under this next phase, Elixir will not only be funded for its remaining work commitments to secure 100% retention of its Taroom Trough acreage, but will also pursue the definition of its initial Reserves. This will be supported by the planned addition of at least a 1,000-metre horizontal sidetrack, multi-stage stimulation and a production test as part of the Lorelle-3 appraisal well campaign, which is scheduled to commence in January 2026. Elixir expects the capital injection to accelerate its Phase-2 strategic objectives by more than 12 months.
Elixir’s managing director and CEO Stuart Nicholls said: “This is a moment of recognition and validation for Elixir with Omega becoming substantial shareholders and supporting the pursuit of the company’s maiden reserves via the expanded program at the high-impact appraisal well at Lorelle-3. Lorelle-3 is set to be a defining well in the evolution of the Taroom Trough and Elixir’s journey, as it may demonstrate that Elixir can convert its huge Contingent Resource position to Reserves via the application of horizontal drilling and multi-stage stimulation.
"Having formal collaboration mechanisms will allow Omega and Elixir to share experiences and accelerate technical learnings in progressing towards the unlocking of what is the largest undeveloped East Coast gas resource. The Taroom Trough has the scale to not only adequately service the deteriorating east coast energy market but also keep Queensland’s extremely valuable export industry full for multiple decades to come.”
Accelerating work programs
Elixir plans to use the money from the capital raising to accelerate key work programs supporting both Phase 1 (acreage retention) and Phase 2 (Reserve definition) of its Strategic Plan.
Funding will support the Lorelle-3 appraisal well campaign, including drilling the vertical pilot and undertaking an expanded logging and coring program designed to qualify a substantial portion of campaign expenditure for R&D purposes (up to 48.5% of total costs). The program has been expanded to incorporate a horizontal sidetrack of at least 1,000 metres into the Tinowon ‘Dunk’ Sands, followed by multi-stage fracture stimulation and testing. If commercial flow rates are achieved, Lorelle-3 could underpin the conversion of part of the 1,057 BCFe of net 2C Contingent Resources in ATP2056 to Reserves.
Funds will also go towards fracture stimulation and production testing of the 23 metres of net gas pay intersected at the Diona-1 exploration well in March 2026. In the event of a successful test and subject to joint venture approvals, Elixir intends to progress tie-in works to connect Diona-1 to the nearby pipeline, enabling extended flow testing and the potential commencement of cash-generating production. In addition, the company will acquire 200 kilometres of new 2D seismic over ATP2057 through the Teelba seismic program, a requirement to complete remaining permit commitments and to help define additional Permian reservoirs that may be continuous with Shell’s main operating area, with potential to support new Contingent Resource bookings.
Investment details
Omega has agreed to invest up to $14.6 million to acquire approximately 356.5 million new fully paid ordinary shares in Elixir under a two-tranche placement, giving it a 19.43% stake in the company.
- Tranche 1 will raise about $13.94 million through the issue of roughly 339.9 million shares under Elixir’s existing placement capacity.
- Tranche 2 will raise a further $0.68 million via the issue of approximately 16.6 million shares, subject to shareholder approval at an extraordinary general meeting expected to be held in January 2026.
The shares will be issued at $0.041 per share, matching the closing price on the day Elixir received Omega’s initial non-binding term sheet and representing a 2.4% discount to the last traded price of $0.042.
Alongside Omega’s placement, Nero Resource Fund has agreed to subscribe for $2 million at $0.041 per share for approximately 48.8 million new shares in a conditional tranche-2 placement.
Indicative timetable
Nero is a prominent investor in early-stage Australian resource companies. Its participation is further support for Elixir’s Taroom Trough strategy at this stage of its development.