Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has reported one of its most active quarters to date, highlighted by strong appraisal outcomes at its flagship Taroom Trough project in Queensland and a clear run of near-term catalysts as it moves towards potential reserve booking.
The company completed drilling, coring and casing of the Lorelle-3 and Lorelle-3H wells in ATP2056 on schedule and within budget, with results exceeding internal expectations.
Managing director and CEO Stuart Nicholls said the company was now entering a “key catalyst period”, with upcoming flow testing expected to define the next stage of development.
Lorelle wells deliver strong gas-condensate results
At the vertical Lorelle-3 pilot well, Elixir confirmed four hydrocarbon-bearing reservoirs across the Permian section, delivering a combined 148 metres of net gas-condensate pay.
The results included:
- 60 metres of net pay in the Lorelle Sandstone
- 59 metres across six zones in the Kianga Group
- 28 metres in the Tinowon ‘Dunk’ Sandstone
- Smaller contributions from the Overston Sandstone
The company then sidetracked into the horizontal Lorelle-3H well, drilling a 1,157-metre lateral — the longest recorded in the Taroom Trough to date.
Importantly, the horizontal section returned 1,033 metres of net gas-condensate pay within the primary Tinowon ‘Dunk’ reservoir, with average porosity of 11.2% and peaks of up to 18%, outperforming the vertical well.
These results suggest improved reservoir continuity and quality laterally, supporting the broader basin model and future development potential.
Stimulation and a 30-day production test at Lorelle-3H remain scheduled for June 2026.
Seismic expands western Taroom footprint
Beyond drilling, Elixir completed a 225-kilometre 2D seismic program across ATP2057, targeting prospective acreage on the western flank of the Taroom Trough.
The survey area lies on trend with the Lorelle discovery and near neighbouring activity, helping refine subsurface imaging and future drilling targets.
Diona-1 testing and early production potential
At the Diona sub-block (ATP2077), the company is preparing for stimulation and testing of the Diona-1 well, scheduled to begin in late April.
If successful, Diona-1 could move quickly into early production via an extended well test, supported by its proximity to existing pipeline infrastructure less than 100 metres from the wellhead.
Strong liquidity and funding visibility
Elixir ended the March quarter with about $14.3 million in cash and access to an undrawn R&D facility, lifting total available liquidity to $22.3 million.
The company also secured a debt facility of up to $10 million from Endpoints Capital, allowing it to advance up to 80% of its expected FY26 R&D tax refund.
With most of its 2026 capital program already completed — including drilling and seismic — Elixir said it is fully funded for the remainder of the year.
Energy security tailwinds build
The quarter also saw heightened focus on east coast energy shortages, with Queensland government officials and industry participants highlighting the Taroom Trough as a key future gas supply source.
While spot gas pricing softened to around $10.35/GJ during the period, Elixir noted this still reflects a structurally undersupplied market and ongoing investment opportunity.
Catalyst-rich period ahead
With flow testing at both Lorelle-3H and Diona-1 imminent, Elixir is positioning to transition from appraisal to reserve definition.
The upcoming results will be closely watched as the company works towards booking its maiden 2P reserves in the Taroom Trough and demonstrating the commercial potential of its growing gas-condensate position.