Elixir Energy (ASX:EXR) strikes a deep vein of opportunity at Project Grandis

Elixir Energy (ASX:EXR) strikes a deep vein of opportunity at Project Grandis

January 15, 2025 Off By MarketOpen

Elixir Energy’s (ASX:EXR) latest milestone at the Grandis Gas Project, encompassing ATP 2044 and ATP 2077, signals a bold step forward in the Australian energy landscape.

The company’s maiden contingent resource certification for deep dry coal reservoirs not only underscores its technical expertise but also highlights the untapped potential within the Taroom Trough.

A Compelling Resource Upside

Elixir’s resource tally just got a significant boost, with the independent auditor ERCE certifying a 2C recoverable resource of 245 billion cubic feet (BCF) from the deep dry coals.

This adds 17% to the project’s total 2C recoverable gas resources, now standing at 1,715 BCF. Notably, the estimated gas in place for these deep coals surged to 58,137 BCF—a remarkable 120% increase.

As Elixir Energy Managing Director Neil Young emphasised,

“The massive extent of the gas in place in these deep coals—more than 30 trillion cubic feet—illustrates the incredible resource upside in this play.”

His statement encapsulates the monumental potential the Taroom Trough holds for future energy developments.

A First for Deep Coal Gas in the Taroom Trough

This certification marks the first instance of contingent resources being recognised from deep dry coals in this region. Data from the Daydream-2 well, drilled and tested in 2023 and 2024, played a pivotal role.

The well uncovered significant gas contents at depths between 3,698 and 3,786 metres, producing gas with a distinctive chromatographic signature, differentiating it from sandstone-derived gas.

The significance of this achievement is not lost on Elixir’s leadership, with Young noting:

“Investigating the potential of the deep dry coals in the Taroom Trough was one of the key objectives for our Daydream-2 vertical well, and to make a very material contingent resource booking from the first well that sought to do so is a great outcome for Elixir—and the broader play.”

Strategic Implications for Elixir and the Market

The addition of deep coal gas resources complements Elixir’s ongoing development strategy in the Taroom Trough, where minimal processing requirements and high methane content offer commercial and operational advantages.

However, with these resources classified as “development unclarified,” questions remain regarding the economic viability and timing of full-scale development.

Still, the broader implications are promising.

As ERCE’s analysis confirms, this development aligns with global trends towards exploring unconventional reservoirs, providing a competitive edge for companies willing to venture into deeper and more complex formations.

In an era where energy security and diversification are paramount, Elixir Energy’s milestone at Project Grandis not only enhances its project portfolio but also reinforces Australia’s role as a leader in innovative energy solutions.

While challenges remain in translating this resource potential into production, Elixir’s achievement sets a precedent for what’s possible when ambition meets technical ingenuity.

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