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Highlights
- Elixir Energy confirms gas flow at Daydream-2 well in Queensland.
- Flow rates lower than expected but seen as remediable in future wells.
- Company secures long-term landholding for future gas production.
Elixir Energy (ASX:EXR) is advancing towards becoming a future gas producer with positive results from its Daydream-2 well in Queensland, although initial flow rates have fallen short of some market expectations. The company confirmed that five out of six zones in the well are producing gas, and despite lower-than-expected flow rates, Elixir Energy, listed on the ASX energy stock, remains optimistic about the well's future potential.
The company noted that the current flow rate was lower than previously measured but believes this is a temporary issue that can be addressed in future drilling programs. The recent fluctuations in flow performance are likely due to the frequent opening and closing of the well during operations, or reactions to fluids introduced into the wellbore.
Elixir has plans to retain the Daydream-2 well as a future gas producer and is now moving forward with securing a long-term retention lease for the project area. This lease, known as a Potential Commercial Area (PCA) in Queensland, allows for a maximum term of 15 years, providing the company with extended flexibility to develop its assets.
Elixir has shifted its focus from its previous operations in Mongolia to Queensland’s Taroom Trough, where it has seen promising results. The company’s work, combined with that of nearby operators, is unlocking valuable gas resources for Queensland and Australia, including potential supply for the Gladstone region.
While some market commentators had anticipated higher gas flow rates, the company’s leadership emphasized that the Daydream-2 program has already exceeded their expectations since acquiring the Project Grandis asset over two years ago.
Elixir Energy remains committed to developing its gas resources at Daydream-2, with ongoing efforts to stabilize flow rates and secure the necessary approvals for long-term production in Queensland.
