EXR to drill this month - update on funding

ASX:EXR

Published 03-OCT-2023 10:00 A.M.

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Our energy Investment, Elixir Energy (ASX: EXR) is now a few weeks away from drilling its QLD gas project.

EXR expects to be drilling Daydream-2 in the last week of this month.

Today, EXR put out a funding update by highlighting two more funding opportunities for the company.

EXR expects to receive ~$400k from its FY23 R&D grant claim.
EXR expects to receive debt funding secured against its FY24 R&D claim.

The second one is more important because ~48.5% of EXR’s well costs will qualify for an R&D rebate.

The debt facility just means EXR gets to receive this amount upfront instead of having to wait for the end of the FY24 financial year - then, once the R&D grant is paid back to EXR, they can just pay down the debt facility.

Basically, EXR could get the funding during the drill program later this month instead of getting it in ~Q3-Q4 of 2024.

Update on funding for the Daydream-2 well:

Over the last two months, EXR has made significant progress toward funding its upcoming well:

EXR had $9.5M cash in the bank at 30 June 2023 ✅
EXR raised $7M via a placement at 7c per share ✅
EXR secured ~48.5% R&D grant funding for the well and has now signed a debt funding agreement which will mean EXR gets those funds way ahead of lodging its R&D grant ✅
A share purchase plan to raise $3.5M at 7c per share 🔄

Now, EXR is running a Share Purchase Plan (SPP) to raise another $3.5M from existing shareholders.

Existing shareholders can buy up to a maximum of ~$30k in new shares at 7c per share.

For every two new EXR shares purchased under the SPP, investors would also get one free option

The options have an exercise price of 12c per share and an expiry date of 17 October 2026.

Below are the key dates for the SPP:

What is EXR drilling, and what is the goal?

EXR’s Daydream-2 well is an appraisal well targeting a ~395 billion cubic feet contingent resource.

EXR is drilling an appraisal well, which means the company is targeting an already discovered hydrocarbon system to try and book a maiden reserve number.

A reserve is typically the last step before a discovery can be commercialised.

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).

EXR recently put out a video that tells the full story pretty well, check out that video below: