Impressive Initial Flow Test Results

Source: 4/5/2024, Location: Not categorized

HIGHLIGHTS • Highly encouraging initial flow test in the Lorelle Sandstone
• Stabilised flow rate of 1.3 million cubic feet per day achieved without stimulation
• Stimulation and multiple zone flow testing to follow imminently

Elixir Energy Limited (“Elixir” or the “Company”) is pleased to provide an operations update on its 100% owned Grandis project located in Queensland, adjacent to the Wallumbilla gas hub.

Following a recent successful suite of Diagnostic Formation Integrity Tests (DFITs) conducted at Daydream-2, the Company decided to test the free-flowing capacity of the Lorelle Sandstone between 4,200 and 4,217 metres (the zone which flowed into the well bore late last year).

The test has been highly successful – with a maximum rate of 2.3 Million Standard Cubic Feet Per Day (MMSCFPD) and stabilised flow rate of 1.3 MMSCFPD (through a 20/64 choke). Elixir understands this is the deepest unstimulated flow of gas in onshore Australia East of the Perth Basin.

The flow test was conducted following encouraging results from the DFIT over the permeable Lorelle Sandstone (the other DFITs conducted went to plan and provided useful data for the final design of the stimulation program). The test was conducted over two distinct flow periods. The well is now shut in for longer term pressure build-up before stimulation begins later in the month.

The testing work was not impeded by heavy recent rain in the region, which reflects its favourable ease of access and well constructed civil works. The Daydream-2 lease could well be utilized again for another appraisal well – Daydream-3 – for which preliminary planning has commenced (but whose final design will ultimately be informed – inter alia – by the imminent outcomes from Daydream-2).

The gas flow was not associated with any water or condensate, other than the fluid already in the wellbore. A total of 0.6675 MMSCF of gas was produced over both flow periods. Strong build-ups were seen during both shut in periods.

Appendix 1 provides the information required with respect to this announcement under ASX Listing Rule 5.30.

In the next few weeks the stimulation phase of the Daydream-2 program is due to commence and will be followed by more extensive flow testing. As flagged previously, the stimulation program will target 6 zones (but only 19% of the total net pay) and will include this natural flowing sandstone.

The Lorelle Sandstone’s flowrate is expected to materially increase post stimulation. That in turn is planned to be built upon with gas flows from the tight sandstones and coals above the Lorelle.

Gas samples have been obtained and are being sent for laboratory testing. Preliminary onsite analysis confirmed the expected low (pipeline quality) CO2 component (1.6%).

Elixir’s Managing Director, Mr Neil Young, said: “this is a fantastic result – achieving a material stabilized flow rate means that the gas kick we got late last year was not just an isolated freak of nature. The Lorelle is now expected to be a major contributor to the final results of Daydream-2 – and could really boost the economics of the vast unconventional resources of the Taroom Trough.”

Elixir’s Chairman, Richard Cottee, added: “like CSG at the turn of the century heralding the start of a whole new gas play in Australia, this discovery, combined with other activities in the Taroom Trough, may just about herald a new – and very well located - Queensland gas play at a critical time of a looming domestic gas shortage.”

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