Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has delivered what could be the deepest unstimulated flow of gas in onshore Australia east of the Perth Basin at its 100% owned Grandis project in Queensland, adjacent to the Wallumbilla gas hub.
Elixir reported a highly encouraging initial flow test in the Lorelle Sandstone at the Daydream-2 well, achieving a stabilised flow rate of 1.3 million standard cubic feet per day (MMSCFPD), without stimulation, and peak rate of 2.3 million MMSCFPD.
Elixir understands this is to be the deepest unstimulated flow of gas in onshore Australia East of the Perth Basin.
“Not just an isolated freak of nature”
Elixir managing director Neil Young said, “this is a fantastic result – achieving a material stabilised flow rate means that the gas kick we got late last year was not just an isolated freak of nature. The Lorelle is now expected to be a major contributor to the final results of Daydream-2 – and could really boost the economics of the vast unconventional resources of the Taroom Trough.”
Elixir chairman Richard Cottee added: “like CSG at the turn of the century heralding the start of a whole new gas play in Australia, this discovery, combined with other activities in the Taroom Trough, may just about herald a new – and very well located – Queensland gas play at a critical time of a looming domestic gas shortage.”
Flare (estimated to be 15 metres in height) from the Lorelle Sandstone Test at Daydream-2 during the 1st flow period.
Following a recent successful suite of diagnostic formation integrity tests (DFITs) conducted at Daydream-2, Elixir decided to test the free-flowing capacity of the Lorelle Sandstone between 4,200 and 4,217 metres — the zone that flowed into the well bore late last year.
The flow test was conducted following encouraging results from the DFIT over the permeable Lorelle Sandstone. The test was conducted over two distinct flow periods. The well is now shut in for longer-term pressure build-up before stimulation begins later in the month.
The testing work was not impeded by heavy recent rain in the region, which Elixir credits to its favourable ease of access and well constructed civil works.
Stimulation program ahead
The stimulation phase of the Daydream-2 program is due to commence in the next few weeks, followed by more extensive flow testing.
The stimulation program will target six zones (but only 19% of the total net pay) and will include this natural flowing sandstone. The Lorelle Sandstone’s flow rate is expected to materially increase post-stimulation. That in turn is planned to be built upon with gas flows from the tight sandstones and coals above the Lorelle.
The company also says that preliminary planning for another appraisal well, Daydream-3, has commenced, the final design of which will be informed, inter alia, by the imminent outcomes from Daydream-2.