Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has paused flow testing at the Diona-1 exploration well in Queensland’s Surat-Bowen Basin, while the ATP2077 Diona joint venture assesses artificial lift options to accelerate fluid recovery.
Diona-1 has flowed back about 46% of injected stimulation fluid but has not yet naturally reached the targeted 50-60% recovery level required before stabilised testing.
The well has continued to produce gas with near-zero impurities, while the volume of returning stimulation fluid was viewed as positive for reservoir connectivity.
JV moves to artificial lift
The joint venture, in which Elixir holds 49% as operator and Xstate Resources Ltd holds 51%, is now assessing artificial lift systems before recommencing flow testing of the gas-condensate resource.
Non-essential equipment is being demobilised to reduce costs while wellhead pressure and fluid levels continue to be monitored.
The JV has also briefed Sproule ERCE to prepare an independently certified Contingent Resource for the 375-square-kilometre Diona sub-block.
Elixir said results to date supported the potential for a new material Permian gas-condensate resource in the Surat-Bowen Basin.
What’s next
Managing director and CEO Stuart Nicholls said artificial lift was needed to reach the testing phase and assess ultimate recoveries, while longer-term appraisal was likely to involve multi-stage stimulated horizontal wells.
“Diona-1 has provided valuable information about the recoverability of Elixir’s greater Taroom Trough gas-condensate and light oil resource.
“Installation of artificial lift is necessary to reach the testing phase of the Diona resource and assess ultimate recoveries. Positively, the performance of the Diona-1 well to date has been encouraging given the constant gas flows against the fluid column.
"Ultimately and much like all other areas of the Taroom Trough, multi-staged stimulated horizontal wells are the more optimal drilling and completion strategy. Given the known gas-condensate-bearing reservoirs within the shallower setting of Diona, this can likely be done cost-effectively in the future and would be the logical next appraisal and development step for the Diona resource, where the size of that resource is now under independent assessment.”
He said the known gas-condensate reservoirs at Diona’s shallower setting could likely be developed cost-effectively, with the proximity to the Waggamba pipeline providing a potential fast-to-market pathway.