Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) made material progress across its Taroom Trough gas portfolio during the December 2025 quarter, supported by a $16.6 million strategic investment from Omega Oil and Gas and the commencement of its high-impact Lorelle-3 appraisal program.
During the quarter, Omega Oil and Gas acquired a 19.43% stake in Elixir via a two-tranche placement, providing $14.6 million, with shareholder approval for the second tranche received after quarter end. Nero Resource Fund also invested a further $2 million, taking total proceeds to approximately $16.6 million and strengthening the company’s institutional register.
Elixir finished the quarter with approximately $21 million in cash, with a further $2.68 million received post-quarter following approval of the second tranche. The funding positions the company to progress Phase 2 of its Strategic Plan, focused on reserve definition across its Taroom Trough acreage.
Following completion of the placement, Omega exercised its right to nominate two directors. Peter Stickland and Anthony Tarr were appointed as non-executive directors after quarter end.
The work being done and investments being made come at a time when east coast gas pricing remained elevated during the quarter, with Wallumbilla spot prices reaching approximately $14 per gigajoule and Brisbane STTM prices averaging close to $13 per gigajoule. Elixir noted that pricing continues to highlight the need for new domestic gas supply.
The company also noted the Federal Government’s proposed gas market reforms, although the impact on long-term development of the Taroom Trough remains unclear at this stage.
“The company is in an enviable position, being well funded and on the cusp of delivering a company-defining result from the Lorelle-3 well, while holding the largest acreage position in the highly prospective Taroom Trough in Queensland. This compelling position is further strengthened by the anticipated completion and testing of the Diona-1 well, scheduled for the coming quarter, which also has the potential to be materially impactful,” EXR managing director and CEO Stuart Nicholls said.
Lorelle-3 appraisal well progresses to drilling
Preparation and procurement activities for the Lorelle-3 appraisal well were completed during the quarter, with drilling commencing shortly after period end following mobilisation of the Helmerich & Payne FlexRig 3 (Rig 648).
Lorelle-3 has qualified under the Federal Government’s R&D Tax Incentive Advanced Finding process, with eligible drilling, completion, stimulation and testing costs expected to attract a refund of up to 48.5%, estimated at approximately $9.7 million. Elixir has also initiated documentation to enable borrowing against this expected refund to manage cash flow timing.
The Lorelle-3 program has been expanded to include a vertical pilot hole to approximately 3,600 metres' depth, followed by a planned horizontal sidetrack of at least 1,000 m into the primary Dunk sandstone target. The well will then be suspended for multi-stage fracture stimulation and flow testing, with results intended to support conversion of contingent resources to maiden reserves.
ATP2044 retention secured
Elixir received approval for the renewal of ATP2044, alongside declaration of a Potential Commercial Area (PCA356) covering 100% of the permit. The retention licence secures the acreage for 15 years and contains independently certified 2C contingent resources of 1,362 BCFe, discovered at the Daydream-2 well.
During the quarter, Elixir also booked an additional 189 BCFe of 2C contingent gas resources in ATP2077 Block B following an independent assessment by Sproule ERCE. This lifted total Taroom Trough 2C contingent resources to approximately 2.8 TCFe, representing an 8% increase across the broader portfolio.
Seismic and appraisal planning at ATP2077
Elixir entered into a data sharing and ingress agreement with QGC (Shell), allowing QGC to acquire 3D seismic across the northern and western portions of ATP2077 Block A in 2026. Elixir will receive the processed seismic data, which is expected to assist in de-risking future appraisal drilling, including the planned Daydream-3 well.
Diona-1 stimulation and testing preparation
At the Diona sub-block, Elixir and joint venture partner XState Resources advanced planning for stimulation and flow testing of the Diona-1 well, which confirmed 23 m of net gas pay in the prior quarter. Seismic reprocessing work commenced during the period, with multistage stimulation and testing scheduled for the coming quarter.
Successful flow testing could position Diona-1 for early tie-in and production, supported by nearby pipeline infrastructure.
Outlook
Elixir enters the March 2026 quarter funded to execute key elements of its Phase 2 strategy, including drilling and testing at Lorelle-3, flow testing at Diona-1 and acquisition of additional seismic data across the Taroom Trough.