Elixir Energy (ASX:EXR) Lorelle-3H fracture stimulation completed ahead of flow back program

Elixir Energy has completed the designed 12 stage fracture stimulation program at its Lorelle-3H appraisal well within ATP2056 in Queensland’s Taroom Trough.

The company is now milling out stage plugs before commencing flow back operations followed by 30 days of gas condensate production testing.

Highlights

• 12 stage fracture stimulation program completed as designed.
• 100% of the proppant pumped was placed within the target formation.
• Stage plug milling operations underway before staged flow back.
• 30 days of gas condensate production testing to follow flow back.
• Lorelle-3H includes a 1,157m horizontal sidetrack into the primary target in the Tinowon Dunk Sandstone reservoir.

Elixir reported that the designed 12 stage fracture stimulation covered 1,033m of net gas condensate pay within the Tinowon Dunk Sandstone reservoir at the Lorelle-3H appraisal well.

The program was executed by Haliburton, with 100% of all proppant pumped being placed within the target formation, achieving a permeability pathway into the reservoir that was confirmed by multiple fall off pressure tests.

The company also reported that all other pressure responses observed from the formation were consistent along the horizontal length of the well and were as per expectations.

The company has subsequently rigged up and run in hole with the coiled tubing unit to commence milling out the stage plugs installed during the fracture stimulation.

These operations are expected to take 1 to 2 days, with the Lorelle-3H well in partial flow back whilst each stage plug is milled.

Elixir and Enserve SLB have also completed rigging up the flow testing equipment required to commence the flow back and production testing program, including specialised equipment to measure multi phase fluid, gas and condensate flow during the flow back period.

Upon completion of the milling operations, Elixir will rig down the coiled tubing unit before commencing the staged flow back of the Lorelle-3H well up the 4.5″ casing.

The company said studies completed by Elixir and SLB found a cleanup process using methodical increases in choke size over time will be best practice in order to preserve fracture stimulation placement, ease the well into gas breakthrough, allow management of back pressure on the reservoir and prevent damage or skin formation.

Following the cleanup process and observation of clean returns, Elixir will then proceed to bean up the choke and commence the proposed 30 day flow test.

Lorelle-3 was drilled in two phases. Initially the pilot hole was drilled to 3,580m total vertical depth and collected core and logs in an expanded evaluation program across the various Permian sandstone reservoirs within the Taroom Trough.

The petrophysical results were above expectations and demonstrate multiple thick gas and gas condensate bearing reservoirs as viable appraisal targets amongst the 148m of measured net gas condensate pay.

The second phase of the drilling campaign included the placement of a 1,157m horizontal sidetrack into the primary target in the Tinowon Dunk Sandstone at 3,332m measured depth below rotary table, which has been cased and stimulated across 12 stages for production testing.

Elixir stated that the Tinowon Dunk Sandstone horizontal and 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.

The objectives of the flow testing program include supporting modelling that recoveries of commercial quantities of gas and condensate from multi stage stimulated horizontal wells in the Tinowon Dunk Sandstone can be achieved, measuring gas and condensate ratios and compositions, and measuring and recording pressures, temperatures and other key flowing conditions in order to support the preparatory work required for development.

The company also noted that the Lorelle-3 appraisal well costs associated with its qualifying activities covering drilling, coring, logging, analysis, completion, stimulation and testing are eligible 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.

The next activities outlined by the company are completion of the stage plug milling operations, staged flow back of the Lorelle-3H well and the proposed 30 day flow test.

The flow testing program includes measuring gas and condensate ratios and compositions, together with pressures, temperatures and other key flowing conditions in order to support the preparatory work required for development.

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