Elixir Energy (ASX: EXR) has announced outstanding results from its Lorelle-3 pilot well, confirming four material gas-condensate reservoirs and validating a northward extension of Shell's Dunk play.
This success supports accelerated appraisal and potential maiden reserves for the Taroom Trough.
The Lorelle-3 pilot well intersected a substantial 148m of net pay across four distinct reservoirs.
These included the Kianga Group with 59m, the Lorelle Sandstone with 60m, the Tinowon Dunk Sandstone with 28m, and the Overston Sandstone with 1m.
Maximum porosity figures observed were strong, ranging from 9% to 17%, with average porosities recorded between 7% and 9% across the key reservoirs.
The total gross pay across the interval was 457m, with these significant results independently peer-reviewed by SLB.
Northern Dunk Play Extension Validated
Crucially, the Tinowon Dunk Sandstone has been identified as the primary horizontal target.
Its successful intersection confirms a northward extension of Shell’s Dunk play, venturing beyond Shell's established core acreage.
A substantial 1,000m+ horizontal sidetrack into the Dunk is already planned, which will be followed by multi-stage fracture stimulation and flow testing during 2026.
This latest success significantly validates the prospectivity of the Taroom Trough, which aligns with the estimated ~2.8 TCF of independently certified 2C Contingent Gas Resources.
R&D Tax Incentive Bolsters Economics
The Australian Government’s Research and Development Tax Incentive offers a significant financial boost to Elixir Energy.
Qualifying activities for the Lorelle-3 well are eligible for a refund of up to 48.5% of costs.
This incentive will notably reduce the overall project costs, thereby enhancing the economic viability of the ongoing appraisal and future development phases.
In FY25, Elixir previously received a A$7.9m R&D refund, with further potential refunds expected to bolster near-term liquidity.
Path to Maiden Reserves Clarified
The successful results from Lorelle-3 mark a pivotal step towards Elixir Energy booking maiden reserves for both the company and the broader Taroom Trough.
The upcoming flow testing in 2026, following the horizontal sidetrack, is the key catalyst required to convert the existing contingent resources into probable or proven reserves.
The company's annual report highlighted a strategic plan to convert 150 BCFe of 2C resources to 2P by the end of 2027, a target now bolstered by these encouraging results.
Outlook
The Lorelle-3 results represent a significant de-risking event for Elixir Energy, validating key reservoir targets and a crucial northern extension of the Dunk play.
With a clear path now laid out for appraisal and potential reserve booking, the company's near-term focus will be on the execution of the planned horizontal sidetrack and flow testing, supported by attractive R&D tax incentives.
