Elixir Energy (ASX:EXR) charts clear course to production in Queensland’s emerging gas hub

Elixir Energy (ASX:EXR) is carving out a compelling position in Queensland’s Taroom Trough, where it holds the largest net acreage and a multi-TCF certified resource—placing it on a fast track toward production by 2027.

Surrounded by heavyweight investment and infrastructure, the company is executing a disciplined strategy to turn exploration success into commercial reality.

When a Supermajor like Shell lays down nearly 500km² of 3D seismic and brings in a million-pound rig, the industry takes notice.

But it’s Elixir Energy nestled to the north, south and east of Shell’s primary gas investment zone, that’s quietly executing a strategy to transform its under-the-radar success into cashflow-producing reserves by 2027.

The company’s updated Strategic Plan outlines a methodical three-phase approach to retain its tenements, prove commercial reserves, and deliver early production—all while capitalising on adjacent infrastructure and operational momentum generated by its better-capitalised neighbours.

“We are strategically positioned to be a fast follower in the Taroom Trough,” Elixir Managing Director Stuart Nicholls said. “By leveraging the development being undertaken around us, we can move with speed but also with discipline.”

The early signs are promising. Elixir’s Daydream-2 vertical well flowed up to 2.8 mmscfd (~3 TJ/d) post-stimulation—just shy of commercial viability for a vertical well.

While formation damage impacted long-term flow rates, the result affirms the gas-charged nature of the Permian Dunk Sands, the very same formation targeted by Shell’s aggressive program.

The Taroom Trough’s unique combination of location and quality also sets it apart. Direct access to the Wallumbilla Gas Hub—Australia’s benchmark pricing point—means producers here enjoy high East Coast gas prices and proximity to more than 25 mtpa of LNG capacity.

The low-impurity gas reduces processing costs, and condensate-rich flows offer added monetisation through Queensland’s two local refineries.

With 2.6 TCFe of independently certified Contingent Resources already under its belt, Elixir is preparing to drill the Diona-1 and Lorelle-3 wells, followed by a campaign at Daydream-3, where Shell’s Bathurst-5 well just 7 km away recently flowed gas and condensate.

Importantly, Elixir is taking a capital-disciplined approach: it will only advance to the next phase of development when supported by a favourable cost of capital—potentially unlocking significant value uplift as neighbouring activity de-risks the basin further.

It’s not often that a nimble junior can surround itself with Supermajors and still hold the biggest land position.

For Elixir, the next 12–24 months are shaping as a defining chapter in the quest to become Queensland’s next gas producer.

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