Arrowhead is updating its coverage on Elixir Energy (Elixir, EXR, or the company) with a fair value bracket of AUD 0.30 per share to AUD 0.42 per share (share price on May 29, 2024: AUD 0.12) based on a Relative Valuation method.

  • Elixir drilled its appraisal well, Daydream-2 in Q4 2023; laboratory analysis of cutting
    samples revealed the presence of clay coatings on certain sands at depths of ~4,200 metres (m), which preserved porosity and permeability at this depth; this resulted in an increase in prospective resources in ATP 2044 to 3.6 Tcf (2U).
  • May 2024, Elixir upgraded its 2C contingent resources for its ATP 2044 in Queensland to 1,297 billion cubic feet, an increase of 328%.
  • In April 2024, Elixir commenced a six-stage stimulation program, targeting two coal zones, three tight gas zones and the Lorelle Sandstone; Halliburton was hired as the lead contractor for the stimulation program, this program is currently in abeyance and is expected to resume in July.
  • In March 2024, Elixir completed the Diagnostic Fracture Integrity Tests (DFITs) at Daydream-2, which
    provided useful data for the final design of the stimulation program, followed by initial flow tests that demonstrated a stabilized flow rate from the Lorellem Sandstone without stimulation.
  • EXR raised AUD 6.5mn (before costs) through the issue of new shares via a placement to institutional and sophisticated investors for the Daydream-2 project.
  • EXR entered an information sharing agreement with Origin Energy Limited (Origin) in November 2023, to provide Origin with information on Carbon Capture and Storage (CCS) garnered from the well, in return for AUD 1mn paid H1 2024 and all incremental costs involved.
  • EXR is entitled to be paid a 48.5% cash credit as a Federal R&D incentive – based on the total costs of the well (including stimulation and testing).