Queensland Gas Assets – Grandis 

OVERVIEW

In August 2022, Elixir Energy acquired a 100% interest in petroleum exploration permit ATP 2044, ATP 2077”A” and ATP 2077”B” in Queensland (now named the Grandis Gas Project).

The Grandis Gas Project covers an area of over 1,000 km² located close to existing gas transmission infrastructure centred on the Wallumbilla gas hub. This hub is connected to domestic and international markets.   In the Grandis area there is easy access to well locations by road.  The Taroom Trough has been an established oil and gas province for many decades.

The Grandis Gas Project has booked an independently certified contingent resource (2C) of 1.7 trillion cubic feet equivalent (TCFE).

ATP 2077 Highlights:

• Drilling by BG Group (now Shell) around a decade ago in the Taroom Trough flowed gas to surface from multiple wells – facilitating this contingent resource booking in Elixir’s adjacent ATP 2044 permit.
• Independently certified by ERC Equipoise.
• Fractured coal target not included.
• The key contingency to be met to move to reserves is to flow at commercial rates.
• Daydream-2 appraisal well reached Total Depth (TD) of 4,300 on 7 December 2023. The Federal Government will pay for 43.5% of the total cost of the Daydream-2 well through its R&D Tax Incentive mechanism.

ATP 2077 block has been added to our Queensland Gas Projects.

The license has 3 geographically separate sub-blocks as follows:

• Sub-block A – this is located immediately proximate to ATP 2044 and contains similar Taroom Trough geology. The recent work undertaken on Project Grandis has underpinned an independently certified contingent resource booking in this sub-block.
• Sub-block B – this also overlies the Taroom Trough. However, given the distance from Project Grandis it has been considered premature to book contingent resources on this area at this point in time.  Elixir will assess the prospective resources for this block in due course.
• Sub-block C – this area lies outside the Taroom Trough and is adjacent to existing gas infrastructure such as the currently largely dormant Silver Springs gas storage asset. Work undertaken by Elixir’s technical team to date has identified some possible shallow drilling targets in this Sub-block. For further information refer to  Project tab for Queensland Gas – Diona.

TECHNICAL SUMMARY

ATP 2044 is prospective for gas and condensate trapped in conventional and unconventional sandstones and fractured coals.  These reservoirs are proven in the Taroom Trough, where the Daydream-1 well, 2km west of the permit edge, flowed gas at rates of up to 3.5 million cubic feet per day.  The primary objective reservoirs are the sandstones and fractured coals of the Permian aged Kianga Formation and Back Creek Group within the Bowen Basin

The tenement is surrounded by much larger oil and gas players.

DAY DREAM- 2 HIGH IMPACT WELL

The Daydream-2 appraisal well was completed in late 2023. The well was approximately 100 metres deeper than originally planned, as the well continued to demonstrate elevated levels of gas in excess of pre-drill estimates. The deeper TD also allows for greater operational flexibility in relation to the next few phases of the Company’s appraisal plans for the well. During the course of drilling the final 100 metres of the well, a rapid increase in the rate of well penetration (“drill break”) was encountered. This drilling break was associated with a gas influx from the formation into the well bore. Using drilling best practice, this gas influx was circulated out of the well to the rig’s flare.

The volume of gas flared was estimated at the wellsite to be approximately 50,000 cubic feet. As a result of the influx, the drilling fluid was “weighted up” and the well safely and successfully drilled to a TD of 4,300 metres. To encounter a permeable reservoir section this deep in the well provides significant upside.

Substantial further work is required to truly establish the implications of this discovery, but these could be materially positive. – if successful will facilitate reserves and increased contingent resource bookings.

OPERATE ALL YEAR ROUND

High impact well, Daydream-2 was completed the end of December 2023 there were no expected weather windows to negotiate with and rig access was almost wholly by sealed road.