Elixir Energy set to add Taroom acreage to its portfolio following Daydream-2 discovery

With its confidence boosted by the recent Daydream-2 gas discovery in Queensland, Elixir Energy (ASX: EXR) looks set to add further acreage to its Taroom Basin portfolio.

Elixir drilled what has the potential to be a major gas discovery when it tapped into a large sandstone reservoir at Daydream-2 within its 100%-owned Project Grandis.

The unexpected gas intersection occurred at the bottom of a well drilled to confirm some coal seam gas potential at higher levels.

Significant new play

Subsequent testing has suggested that the new sandstone reservoir may be part of a significant new play in the region.

In late May, Elixir announced that independent studies had identified a 328% increase in the contingent resource booking for the ATP 2044 permit.

These contingent resource estimates were for the sandstones only in the gas-bearing Permian section and did not include the prospective coal resources, which will be the subject of stimulation and production testing in the coming months.

Preferred tenderer

Elixir, which is currently planning to undertake the next stage of testing of Daydream-2, has now been appointed by the Queensland government as the preferred tenderer for new exploration area PLR2023-1-7 immediately adjacent to its Grandis project.

The permit covers 526 square kilometres and, although it is just one licence, it is divided into three separate geographical areas.

The North Eastern areas are located in the Taroom Trough and are prospective for the same deep gas plays as encountered at Grandis.

These new areas cover 152 sq km and represent a 14% increase of Elixir’s acreage within Taroom, which to date has a 2C contingent resource booking of 1,297 billion cubic feet.

The larger South-Western area, which covers 374 sq km, is prospective for both shallow and deep gas targets.

Finalising approvals

“Elixir will now proceed to obtain an environmental authority and complete any required native title process before being granted the final authority to prospect,” managing director Neil Young said.

“Naturally, we are pleased to be recognised by the Queensland government as the preferred tenderer for a new licence area which is highly complementary to our existing Grandis gas project position.”

“That recognition, in part at least, acknowledges the good work undertaken by our team since we entered Queensland two years ago.”

Elixir has already commenced technical studies on all the areas of the licence to address issues such as the potential addition of contingent and prospective resources, drill targets and potential partners once the licence is formally granted.