Elixir Energy (ASX:EXR) reports sustained gas flow at Lorelle-3H ahead of production testing
Elixir Energy has provided an operational update on its Lorelle-3H appraisal well in ATP2056 within Queensland's Taroom Trough, reporting sustained gas flow during flowback operations following completion of plug milling after the well's 12-stage fracture stimulation program.
The company said the gas-condensate production test is to commence shortly, with production testing to continue throughout July.
Highlights
Lorelle-3H completed plug milling following its 12-stage fracture stimulation program.
Flowback operations have followed the targeted bottom hole drawdown profile based on recent SLB testing studies.
Sustained gas breakthrough occurred after 5 days of cleanup, with gas rates increasing and flowing well head pressure increasing.
The company will commence production testing following the transition from fluid to gas.
Elixir said it will provide a further update when peak gas-condensate rates have been achieved.
Following completion of the plug milling program, Elixir commenced the slow and controlled drawdown of the Lorelle-3H appraisal well on 29 June 2026 through a 12/64th choke.
The company said the drawdown profile has been in line with recent SLB testing studies, which indicated that a daily maximum reduction of approximately 400 psi in bottom hole pressure represented best practice.
Elixir also reported that returns of liquids have been observed as clean stimulation fluid with no solids (sand/proppant) in train, which it said provides confidence that the fracture stimulation stages are settling into place as designed.
On 4 July 2026, Elixir reported official gas breakthrough and sustained gas flow at a bottom hole pressure of 6,300 psi, compared with a reported reservoir pressure of 6,350 psi.
The company said this was a positive indication of the well's future productivity index.
Flowing well head pressure started at approximately 3,200 psi with approximately 1,600 bbls/d of fluid before declining to approximately 1,680 psi with approximately 800 bbls/d, after which it increased to 1,770 psi as at the morning of the announcement.
Over the same period, the company reported that gas flows had risen and that it was observing an inflection of fluid and gas flow as the dominant production phase slowly transitions from fluid to gas.
The company said the further fluid recovered before drawing the well down will ultimately benefit an optimal peak gas production rate and ultimate recovery of the well.
Once the critical dominant phase change from fluid to gas has been observed, Elixir said it will start to bean up the choke of the well and commence production testing.
The company said the test will continue throughout July, during which peak gas-condensate rates will be observed together with any initial decline of the well and its exit rates.
Lorelle-3 is located within ATP2056 in Queensland's Taroom Trough, where Elixir holds a 50% interest and is operator of the Lorelle-3/Lorelle-3H appraisal well, while Santos Limited holds the remaining 50% interest and becomes operator of the permit thereafter.
The project was drilled in 2 phases, beginning with a pilot hole to a total vertical depth of 3,580 m before completion of a 1,157 m horizontal sidetrack into the primary target in the Tinowon 'Dunk' Sandstone.
The horizontal section has been cased and stimulated across 12 stages for production testing.
The company said petrophysical results from the expanded evaluation program were above expectations and demonstrated multiple thick gas and gas-condensate bearing reservoirs among 148 m of measured net gas-condensate pay.
The data and core gathered during the evaluation program led to a series of experiments and laboratory work that supported the design and execution of an optimal stimulation.
According to the company, the Tinowon 'Dunk' Sandstone horizontal flow test is designed to demonstrate commercial flow rates of gas and condensate from the Basin Centred Gas Play and then lead into a possible maiden Reserve conversion of the underlying Contingent Resource.
Elixir also noted that qualifying activities associated with the Lorelle-3/Lorelle-3H well, including drilling, coring, logging, analysis, completion, stimulation and testing, are eligible for up to a 48.5% refund under the Federal Government's Research and Development Tax Incentive through the Advanced Finding granted for the project.
Elixir stated that flowback operations will continue until the transition from fluid to gas has been observed, after which it will start to bean up the choke of the well and commence production testing.
The company said testing will continue throughout July and that it will provide an update when peak gas-condensate rates have been achieved.