Elixir Energy (ASX:EXR) advances Lorelle-3H as horizontal drilling de-risks Taroom Trough play

Elixir Energy has reached a technical inflection point at its Lorelle-3H appraisal well in ATP2056 in Queensland’s Taroom Trough, completing casing of the heel of the horizontal well through the Wallabella coal and into the Tinowon ‘Dunk’ Sandstone.

The milestone marks the transition from pilot hole evaluation to horizontal execution, with the company now preparing to drill a 1,000m+ lateral designed to test commercial flow rates from the Basin Centred Gas Play.

Highlights

• Heel of Lorelle-3H drilled and cased through Wallabella coal into Tinowon ‘Dunk’ Sandstone at 3,319m MDRT
• SLB completed Horizontal Landing Optimisation Study targeting 28m of net pay
• Plan to drill 1,000m+ horizontal section before casing and multi-stage fracture stimulation
• Multi-stage fracture stimulation and production test targeted prior to end-June 2026
• Qualifying activities eligible for up to a 48.5% refund under Federal Government Research and Development Tax Incentive

Operationally, Elixir has plugged and abandoned the reservoir section of the Lorelle-3 pilot hole and kicked off the planned sidetrack, reaching the primary Dunk target on planned angles and azimuths at 3,319m measured depth below rotary table after intersecting the overlying coal.

A 7 inch liner has been run and cemented in place, securing the heel and isolating the coal interval, an outcome the company describes as a significant de-risking event for forward horizontal drilling operations.

The next phase involves running a 6-1/8 inch directional drilling bottom hole assembly with a full logging-while-drilling suite to gather reservoir parameters and hydrocarbon saturation data while geo-steering through the optimised zone within the 28m of net pay identified by the SLB study.

The intent is to drill more than 1,000m of horizontal well bore before casing with 4-1/2 inch casing and suspending the well for a multi-stage fracture stimulation and flow test.

Lorelle-3 is being drilled in two phases, with the initial pilot hole reaching 3,580m total vertical depth and collecting core and logs across Permian sandstone reservoirs within the Taroom Trough in the Bowen Basin.

The company reports that petrophysical results were above expectations and demonstrated multiple thick gas and gas-condensate charged reservoirs as viable appraisal targets.

The current sidetrack is designed to demonstrate commercial flow rates of gas and condensate and potentially lead into a maiden Reserve conversion of the underlying Resource.

As managing director and chief executive officer Stuart Nicholls states,

“Elixir has drilled and cased the heel of the Lorelle-3H well through the overlying coal and into the primary target, the Tinowon ‘Dunk’ Sandstone.”

The corporate implications are not confined to subsurface performance. Costs associated with drilling, coring, logging, analysis, completion, stimulation and testing qualify for up to a 48.5% refund via the Advanced Finding under the Federal Government’s Research and Development Tax Incentive and tax return process, an outcome that offsets capital exposure during appraisal.

Elixir describes itself as the largest acreage holder in the Taroom Trough and is aiming to appraise its ~2.8 TCF of independently certified 2C Contingent Gas Resources, bordering Shell’s primary area of investment across the Basin Centred Gas Play.

Lorelle-3H is the first horizontal well to be drilled and tested outside Shell acreage on the upper western flank of the trough, positioning the upcoming flow test as a key data point in validating the value, quality and materiality of the company’s acreage position.

With horizontal drilling under way and stimulation and production testing targeted prior to end-June 2026, attention now turns to whether Lorelle-3H can convert reservoir parameters into demonstrable commercial flow, a step that would underpin potential Reserve conversion and frame the next stage of appraisal across Elixir’s Taroom Trough holdings.

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