Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has started drilling operations at its high-impact Lorelle-3 appraisal well in Queensland’s Taroom Trough, targeting multiple Permian sandstone horizons within the basin-centred gas play.
Drilling has begun following the successful mobilisation, rig-up and acceptance of the Helmerich & Payne FlexRig 3 (Rig 648), which was transported to the Lorelle-3 site from Brisbane. The rig is now under contract and actively drilling.
Lorelle-3 is located within ATP2056 in the Bowen Basin, where Elixir holds a 50% interest and operates the appraisal well. Santos holds the remaining 50% interest and will operate the permit following completion of the Lorelle-3 campaign.
Two-phase drilling program under way
Lorelle-3 will be drilled in two phases, beginning with a pilot hole planned to reach a total vertical depth of around 3,600 metres. The pilot hole will collect core and log data across multiple Permian sandstone targets within the Taroom Trough’s Basin Centred Gas Play.
The primary target is the Dunk member of the Tinowon Sands, with secondary targets including the Overston and Lorelle Sandstones.
Once target depth is reached, Elixir plans to move immediately into the second phase of the campaign, which involves drilling at least a 1,000-metre horizontal sidetrack into the primary target. The sidetrack will then be cased and suspended in preparation for stimulation and production testing.
The full drilling program is expected to take about 45 days from commencement.
Focus on flow testing and reserve potential
Data and core gathered from the expanded evaluation program will feed into laboratory testing and stimulation design, ahead of a planned multi-stage fracture stimulation and production test.
Elixir intends to complete stimulation and flow testing at Lorelle-3 prior to June 2026, with the well designed to demonstrate commercial flow rates of gas and condensate from the Basin Centred Gas Play.
A successful outcome could support a maiden reserves conversion from the company’s existing resource base.
Cost support via R&D tax incentive
A significant portion of Lorelle-3’s qualifying costs — including drilling, coring, logging, completion, stimulation and testing — are eligible for a refund of up to 48.5% under the Federal Government’s Research and Development Tax Incentive, following the project’s Advanced Finding status.
Strategic location in the Taroom Trough
Lorelle-3 is positioned around 10 kilometres from Shell’s Dunk-1 well, which delivered the strongest penetration of the Tinowon ‘Dunk’ Sands in the Taroom Trough to date. The well will be the first drilled outside Shell’s acreage on the upper western flank of the trough.
Elixir said Lorelle-3 has the potential to validate the value and materiality of its substantial acreage position in the basin.
The company is the largest acreage holder in the Taroom Trough and is working to appraise approximately 2.8 trillion cubic feet of independently certified 2C contingent gas resources. The region benefits from proximity to the Wallumbilla Gas Hub, established pipeline infrastructure and Queensland’s LNG export facilities.
