EXR to drill QLD gas project in October 2023
Our energy Investment Elixir Energy (ASX: EXR) has just set a spud date for its QLD gas project.
EXR expects to be drilling at its Grandis gas project in late October at the “Daydream-2” appraisal well.
For context on the drill program:
EXR’s project already has a “contingent resource estimate” showing 395Bcf of potentially recoverable gas.
The contingent resource estimate sits inside an initial 3.3 Tcf unrisked mean prospective resource.
EXR’s appraisal well will be aiming to:
- Prove commercially viable flow rates
- Increase EXR’s already large 395 bcf contingent resource.
- Book the project’s first gas reserves (converting contingent resources into reserves).
If successful, EXR will have proved out a commercially viable project bordering neighbours like Santos and Shell.
The project is also in a position whereby if commercial it could be put into production to supply the gas hungry Australian east coast as well as the international markets through Queensland’s existing Liquefied Natural Gas (LNG) plants.
We suspect that any successful outcome would make EXR’s project interesting to the majors surrounding it especially given the comments made by Santos’ CEO Kevin Gallagher back in November 2018 where he said - “If the play works then we believe there is multi-TCF potential”.
EXR has already secured the SLB 185 drill rig for the program - the same rig that delivered ASX listed Omega Oil and Gas’ drill programs next door.
EXR plans to drill to a total depth of ~4,200m and target the same reservoir units that was proven at Daydream-1, drilled ~5 kilometres to the west of Daydream-2.
EXR has already locked in 43.5% of the funding for the well via the Federal Government’s R&D Tax Incentive program. At this stage the total well costs aren't clear and there is always a chance EXR looks to raise some more capital going into the drill program.
As of 30 March 2023 EXR had ~$11.7M in cash.
What’s next for EXR’s QLD gas project?
