EXR with gas shows 38x background levels
Our energy investment Elixir Energy (ASX: EXR) just put out a progress report on their QLD gas project, Daydream-2.
Here are our key takeaways from the announcement:
- Elevated mud gas readings - 38x background levels.
EXR also noted in today’s announcement that mud gas readings started to increase as soon as EXR drilled into the primary reservoir target.
EXR mentioned that the gas shows increased from “20 units to a peak of 777 units” - an increase in gas shows of ~38x.
That tells us there is a clear step change in the data where EXR expects to find gas, especially considering EXR is drilling an appraisal well meaning it knows what to expect and where.
2. Drilling intersected the primary reservoir target ahead of schedule
EXR drilled into the primary Kianga reservoir target at ~3,694m depth, close to where EXR had planned pre-drilling but much earlier in the drill program than first expected.
Below is where EXR is relative to its drill plan:
3. The well drilled through ~3,694m of depth - Total Depth for the well is 4,200m.
EXR is now nearing the end of the drill program with only a few hundred metres of drilling left before the well is completed.
We expect to see EXR hit TD within the next few weeks and then run its wireline logging program straight after - this is when we should start to get some more data from the well.
EXR also confirmed that the well would be “cased and suspended for future stimulation and testing operations” - EXR is expecting to run the flow tests in 2024.
What is EXR drilling and the goal?
EXR’s Daydream-2 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 project sits close to a well that Shell is currently drilling and so we think there is a good chance the oil and gas major is watching what EXR is doing.
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 which tells the full story pretty well, check out that video below:
(Source)
What’s next at EXR’s QLD gas project?
Drilling updates 🔄
- Drilling updates along the way (i.e. reached X depth, Reached Y depth etc..) - Announced today ✅
- Well hits TD (Total Depth) of ~4,200m 🔄
- Wireline logging tools are run and data analysed
- Case and suspend for future testing
