EXR - drilling underway in QLD - results inside the next 15 days?

ASX:EXR

Published 29-SEP-2025 09:51 A.M.

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Our domestic energy Investment Elixir Energy (ASX:EXR) just started drilling a well on one of its QLD gas blocks.

(source)

EXR is free carried on all the costs of the well after it signed a farm-out deal on the block back in April.

Basically, EXR retains 49% ownership in the block, without having to put up any capital on this round of drilling.

As of today, the well is 549m of the way down to the planned total depth of 2,600m.

EXR and its JV partner are targeting 3 proven hydrocarbon reservoirs with the first starting at a depth of ~2,300m.

Across the three reservoirs, the well is drilling a 12.5 billion cubic feet equivalent gas unrisked prospective resource:

(source)

The well is expected to hit total depth inside the next 15 days - so we should get results fairly soon here.

Here is the timetable EXR’s JV partner released to market for the drilling program:

(Source)

IF we see EXR and its JV partner hit gas the well could be commercialised relatively quickly because of how close the project is to existing infrastructure.

The block sits right next to the Waggamba to Silver Springs gas pipeline (with a tie-in point ~1 km away).

(Source)

If the well is successful it could also de-risk the rest of the targets inside the block:

What's next for EXR?

The following slide from EXR’s most recent presentation lays out what we can expect to see over the coming months.

(Source)

Here are the catalyst we will be tracking:

1. Drilling of the Diona-1 well

EXR is free carried on this well under a farm-out agreement with ASX listed Xstate Resources.

With drilling now underway we await updates and results.

Next we expect to see an announcement that shows the well hit 2,300m and started drilling into the main reservoir targets.

Then by the second week of October we should start to see some results come in.

2. The conclusion of a “capital process”

This relates mostly to the rest of EXR’s ground in the Taroom Trough.

We assume this means some sort of partnership discussion around financing for the rest of EXR’s work programs.

EXR has talked about being in active discussions regarding this several times now.

It is already partnered with Santos on some of its acreage and earlier in the year we saw supermajor ConocoPhillips was also looking at assets in the region (Source).

We covered all of this in a previous note here: EXR outlines in new strategy for QLD gas project

We also saw $2.7BN Beach Energy come into the Taroom Trough recently, so there is definitely interest in the region from the majors for ground in this part of Australia.