Elixir Energy (ASX:EXR) commences drilling at Diona-1 well

Elixir Energy (ASX:EXR) has commenced drilling at its Diona-1 conventional gas and oil exploration well in Queensland’s Surat-Bowen Basin, signalling progress on both operational and strategic fronts for the company.

The spudding of the well follows the safe mobilisation of the Ventia 101 rig, with drilling operations already casing and cementing the top hole at a measured depth of 549 metres.

Highlights

• Drilling underway at Diona-1 in ATP2077, Surat-Bowen Basin

• Well fully carried by Xstate Resources Limited

• Targets three proven hydrocarbon reservoirs: Showgrounds, Tinowon and Wallabella

• Total planned depth of 2,600 metres, with a 15-day drilling timeline

• Located adjacent to existing pipeline infrastructure less than one kilometre from the well pad

• Potential to open follow-on prospects within the Diona sub-block

The Diona-1 campaign sits within ATP2077 but outside Elixir’s primary focus on the Taroom Trough, yet it plays a critical role in meeting work commitments that secure tenure over the broader permit, including the highly prospective Taroom Trough sub-blocks A and B.

Maintaining the Taroom Trough sub-blocks is central to Phase 1 of Elixir’s strategic plan, as their scale and proximity to Queensland’s extensive gas infrastructure underscore their long-term importance to the company’s broader portfolio.

Situated between the Silver Springs Gas Plant and the Waggamba gas field, the Diona-1 prospect is targeting three proven hydrocarbon reservoirs, including the Showgrounds formation that begins at around 2,300 metres, with drilling scheduled to reach a total depth of 2,600 metres in roughly 15 days, providing near-term visibility on results.

Should the well prove successful, its location next to the Waggamba to Silver Springs pipeline, lying less than 100 metres from the well pad with a tie-in point only one kilometre away, presents an unusually short path to commercialisation that could materially reduce the time from discovery to first production.

Elixir Energy is fully carried on the drilling of Diona-1 by joint venture partner Xstate Resources Limited, which holds a 51 per cent interest in the Diona sub-block compared with Elixir’s 49 per cent.

This arrangement provides Elixir with exposure to the upside of the program without direct capital outlay, while enabling the company to continue prioritising its Taroom Trough activities.

As Stuart Nicholls, Elixir’s Managing Director and Chief Executive Officer, noted,

“On a positive result, Diona may present the Company with a suite of commercial options which may include a timely move into production operations and cashflow generation.”

The statement highlights the dual value of the program, as it fulfils regulatory commitments while also offering the possibility of immediate commercial impact.

As the largest acreage holder in the Taroom Trough, located near the Wallumbilla Gas Hub and connected to multiple pipelines, LNG export facilities and refineries, Elixir underpins its position with 2.6 trillion cubic feet of independently certified 2C contingent gas resources, with Diona-1 serving as both a practical and strategic step towards realising this potential.

Looking ahead, the company’s outlook depends not only on the results at Diona-1 but also on its ability to consolidate and advance its broader Taroom Trough holdings.

While Diona is a discrete prospect, the well is aligned with Elixir’s overarching plan to secure long-term retention of its most valuable acreage.

In an environment where infrastructure access and speed to market are increasingly critical, the campaign highlights how carefully sequenced exploration commitments can advance both regulatory and commercial objectives.

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