Elixir Energy (ASX:EXR) secures R&D funding pathway for Lorelle 3 appraisal well

Elixir Energy has strengthened the funding structure for its upcoming Lorelle 3 appraisal well in Queensland’s Taroom Trough after receiving an Advance Finding under the Federal Government’s R&D Tax Incentive program.

The ruling provides financial clarity for what the company has positioned as one of the most consequential Basin Centred Gas appraisal wells scheduled in Australia’s onshore sector in 2026, both in terms of geological insight and the potential to validate a development pathway across the broader region.

Highlights

• Lorelle 3 qualifies for the R&D Tax Incentive via an AusIndustry Advance Finding.

• Up to 48.5 percent of eligible drilling, analysis and testing costs may be refunded.

• Planned spud in January 2026 using Helmerich and Payne’s FlexRig 3 Rig648.

• Expanded coring and logging program to evaluate Permian Basin Centred Gas targets.

• ATP2056 contains 1,057 BCFe of independently certified 2C contingent resources net to Elixir.

The Advance Finding confirms that eligible costs associated with drilling, coring, logging, laboratory analysis, completion and testing activities at Lorelle 3 can be claimed as part of the R&D tax refund process.

The certainty of eligibility provides a basis for Elixir to pursue lending arrangements that bring forward the expected refunds, easing capital requirements during execution of the appraisal phase.

EY supported the company during the application process.

Lorelle 3 sits within ATP2056, where Elixir holds a 50 percent working interest and operatorship for the appraisal phase, with Santos to assume operatorship thereafter.

The well is planned to be drilled to approximately 3,600 metres, incorporating an expanded evaluation program designed to determine whether the Taroom Trough exhibits the characteristics of a Basin Centred Gas Play.

The data is intended to distinguish this model from alternative geological interpretations and to guide the design of any future stimulation programs should trapped gas and condensates be present.

Operational planning continues to progress, with Shell providing approval for Elixir to finalise terms with Helmerich and Payne for the use of the recently imported FlexRig 3 Rig648, a high-specification unit suited to the depth and coring requirements of the program, and the well is currently targeted to spud in January 2026.

The appraisal location is situated around 10 kilometres from Shell’s earlier Dunk 1 well, which encountered a 37 metre interval of high-quality reservoir in the Tinowon Dunk sands.

Lorelle 3 will be the first well on the upper western flank of the trough outside Shell’s acreage, offering the opportunity to test continuity of reservoir quality and pressure regimes between the two areas.

The outcome is likely to have implications for prospective resource extent and confidence across the basin.

“The financial support secured for the drilling and testing of this well via the Federal Government’s R&D incentive program when combined with the planned lending facilities, provides a critical source of capital required for the drilling, completion and testing of the high impact Lorelle 3 appraisal well.”

From a resource perspective, ATP2056 contains 1,057 BCFe of net 2C contingent resources as part of a broader Taroom Trough position in which Elixir Energy is the largest acreage holder.

The basin is located near the Wallumbilla gas hub, multiple pipeline networks, refineries and LNG export capacity, positioning it within established east coast energy infrastructure should commercial flows ultimately be proven.

The Advance Finding provides certainty around funding mechanics and improves execution visibility heading into the 2026 drilling window.

The key driver now becomes the technical outcome: whether the data collected from Lorelle 3 can validate a Basin Centred Gas model and inform the stimulation and testing approach required to assess deliverability.

The well’s results are likely to shape strategic decision-making across Elixir’s broader acreage and will be closely watched within the domestic gas sector.

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