EXR flow rate to increase?

Elixir Energy (ASX: EXR) has just flowed gas to surface from coals for the first time ever in the Taroom Trough in QLD.

EXR has already delivered a stabilised flow rate of up to 2.5 million standard cubic feet of gas from its Daydream-2 well.

That result on its own was enough to meet the commerciality threshold EXR had set going into its flow test of 2.5 million cubic feet of gas.

That flow rate was from the conventional section of EXR’s well, today, EXR flowed gas to surface from the ucnonventional sections of its well.

Next - EXR will be cleaning out the well and flowing all six separate zones all at once.

We are hoping that means EXR is able to improve on an already strong flow rate from just one of its reservoirs.

So far EXR has already hit our “base case” scenario, and may even achieve our “bull case” scenario depending on how well the next phase of the flow test goes.

Below are the expectations we had set going into this flow test:

• Bull case = >5mmcf per day flow rate
• Base case = 2-5mmcf per day flow rate
• Bear case = <2mmcf per day flow rate

Broker report on EXR:

Taylor Collison analyst Andrew Williams recently published a report on EXR which set the stage for what the upside potential could be for the company on a successful flow test program:

In the note, Williams set a NAV range for EXR shares of $0.27 and $0.58 per share.

Right now EXR is trading at ~14.5c per share.

The report from Taylor Collison lays out the EXR upside scenario, along with the risks.

You can read the full report here: Elixir Energy Limited (ASX:EXR) Taylor Collison Report

Our deep dive on EXR’s project:

A few weeks back we published a deep dive into EXR and its project, including:

• A reminder of EXR’s Queensland gas project
• The upcoming flow program, what do we expect?
• Majors are active in this part of Queensland
• EXR has the right team to make it happen
• East coast gas macro investment thematic

You can click through each of the above to skip to the relevant sections or you can read the full note here:

What’s Next for EXR?

Here is where we think EXR sits relative to its flow test timeline: