- Elixir Energy (EXR) started exploring for gas in Queensland in 2022
- The company is better known for its ongoing work in Mongolia fracking coal bed methane
- Elixir was the first Australian smallcap to flow gas in the Gobi Desert
- Schlumberger, now called SLB, will drill the Daydream-2 appraisal well to a depth of 4200 metres
- Elixir Energy shares last traded at 8.1 cents
Elixir Energy (EXR) has strengthened investor expectations for the development of its Taroom Trough acreage in Queensland, following its shift to the Australian onshore acreage last year.
Elixir is notably recognised as the first Australian smallcap company to successfully extract coal bed methane gas from Mongolia’s Gobi Desert, where its operations are ongoing.
In a brief conversation with company Managing Director Neil Young at Good Oil last year, he said the Queensland operations were obviously going to be more expensive for the company to develop than its Mongolian assets.
However, Mr Young reaffirmed confidence in the onshore market as a solid value proposition.
In the company’s annual report, also released today and reflecting reduced cash on hand year-on-year due to ongoing development expenditure, Mr Young recounted the Albanese government’s poorly received intervention in the east coast gas market.
He suggested that the entire industry has essentially returned to the starting point after those measures were reversed.
Not a maiden well
The company has already drilled two initial targets at its Grandis gas project.
The Taroom Trough refers to an underground geological formation containing hydrocarbon deposits. It dates back to the Permian age, and the acreage is situated near Wallumbilla Hub, a vital node in Australia’s east coast gas pipeline network.
Elixir’s latest appraisal well in Taroom is scheduled for drilling in the final week of October, with essential components en route to the site.
A water bore well is set to be completed by the end of August, and the company reports that construction contracts are “well advanced.”
International footprint
The Grandis project in Queensland now joins Elixir’s Mongolian Nomgon IX project.
The company’s drill rig partner, SLB, formerly known as Schlumberger, will utilise its SLR 185 drill rig to initiate drilling at Daydream-2. The rig is currently in operation nearby, which accounts for the late October timeframe.
Daydream-2 will be drilled to a depth of 4200 metres, with a blowout preventer set to be installed upon delivery, capable of managing the pressures specific to that region.
“It is exciting to be a part of the growing drilling activity in the Taroom Trough – from not only juniors like Elixir – but also from the likes of the Super-Major and large Australian independent who are also in the play,” EXR Managing Director Neil Young said.
“We believe this location – in the success case – is very well placed to supply material volumes of gas to domestic and international markets in a very timely manner.”
Elixir Energy shares last traded at 8.1 cents.