EXR outlines in new strategy for QLD gas project
Our domestic energy Investment Elixir Energy (ASX: EXR) just put out an update on it’s QLD gas project.
Tomorrow morning at 11:00am AEST (9:00am Perth time) EXR’s new Managing Director Stuart Nicholls will be running a webinar to talk through the presentation.
Click here if you want to register for the webinar
The main thing we noticed was EXR starting to talk about moving into production and converting the company’s existing contingent resources into the reserves category.
EXR’s project is in the Taroom Trough in QLD.
EXR’s project has a total project wide 2C contingent resource of ~2.6 TCF (Trillion Cubic Feet) of gas.
A contingent resource in oil and gas is when a resource has been discovered but is not yet considered “commercially viable” to recover.
Resources can sit in the contingent category for multiple different reasons, from regulatory reasons to other things like scale/infrastructure issues.
Moving into reserves means EXR would have de-risked the project enough technically so that the resources are now considered “commercially viable” to produce from.
The following image summaries the different resource categories perfectly:
In today’s announcement we also noticed EXR mentioned it would start “Collaborating on early production opportunities”.
We have mentioned before EXR being in discussions with potential partners for its project.
EXR is already partnered with Santos on a sub-set of its acreage.
AND we know supermajor ConoccoPhillips has been looking at assets in the region…
(Source)
We will be listening into tomorrow’s webinar with EXR’s new Managing director and CEO to see what he has to say about this.
The webinar is scheduled for 11:00 am AEST (9:00am Perth time).
Click here if you want to register for the webinar
Slides that we liked from today’s presentation:
The following slide laid out EXR’s three phase strategic plan well.
The plan seems fairly straight forward, drill two wells, workout project wide flow rates and then start modelling a production scenario from that data:
We also liked this slide which shows how EXR is the biggest acreage holders in the Taroom Trough AND where the companies projects sit relative to the supermajor Shell’s permits in the region:
What’s next for EXR?
The following slide from today’s presentations lays out what we can expect to see in the short/medium term.
Next for EXR we want to see the following two catalysts:
- The drilling of the Diona-1 well - EXR is free carried on this well under a farm-out agreement with ASX listed Xstate. If Xstate can organise it’s finances in time this well is due to be drilled BEFORE 30 September 2025.
And
- The conclusion of a “capital process” - we assume this means some sort of partnership discussion around financing the rest of EXR’s work programs.
🔄 More news from EXR’s neighbour Omega
We will also be watching out for more newsflow from EXR’s regional peer Omega Oil and Gas.
We expect to see Omega put out more detailed results in the coming weeks and to outline its forward plan.
Objective #3: Regional progress
This objective is less specific to things EXR can control, but we think it is important for the EXR story overall. We want to see EXR’s regional peers progress their projects and prove up commercially viable flow rates across the region.
Milestones:
🔄 News from EXR’s peer Omega Oil and Gas
🔄 News from Shell
🔲 News from Santos
🔲 BONUS - New entrants into the region
Source: “What do we expect EXR to deliver?” - EXR Investment Memo 24 Feb 2025
