Elixir Energy enters strategic Taroom Trough farmout with Beach Energy

• Strategic farmout of half of Elixir’s working interests across part of Taroom Trough permits
• Agreements have a total transaction value of $205 million
• Consideration includes $180 million in gross carried appraisal drilling
• Transaction provides Elixir with a funding pathway over four years

Elixir Energy (ASX: EXR) has entered into definitive transaction documents with Beach Energy for a strategic farm-out across parts of its Taroom Trough portfolio in Queensland.

Post a competitive process where Elixir received multiple offers from multiple parties, Elixir has entered into a binding transaction where it will farm out half of its various working interests and operatorship across its Taroom Trough portfolio (excluding its Diona-JV sub block) to Beach Energy.

“This is a transformational transaction for Elixir and a significant validation of the inherent value of the quality and scale of our Taroom Trough portfolio. This farmout is one of the highest valued exploration and appraisal deals in recent Australian oil and gas history and values the Company’s resources 3x higher than their current trading value,” MD and CEO, Stuart Nicholls, said

“Beach has committed $205 million of cash and gross carried expenditure to secure half of our strategic position across our core Taroom assets. Importantly, this provides Elixir with a clear funding pathway through the next four years while substantially reducing the capital required from our shareholders.

“The agreed work program will put the wells and testing in place to accelerate the conversion of our substantial resource base into Reserves, while simultaneously building the production fleet and operating knowledge required to move towards production.

“Post the transaction we will retain our diversified acreage position throughout the Taroom Trough, which includes more than 1,193 sq. km of net acreage including operating our Diona JV.

Mr Nicholls said bringing Beach into the portfolio is also important strategically.

“Their operating capability, production experience and east coast gas market knowledge will be valuable as the Taroom Trough and Elixir transitions from appraisal towards development.

This transaction gives us the capital, partners and appraisal program to accelerate that journey while maintaining substantial exposure for our shareholders to the ultimate value of the Taroom Trough.”

Beach will conduct a detailed work program over the next four-years which will involve the expenditure of $180 million at their sole cost.

The activities within this program will include exploration and appraisal drilling, completion and testing of new lateral wells, geological, geotechnical and geophysical studies, 2D/3D seismic acquisition and processing, operating costs and preparatory works for development.

EXR is up 2.90% to 7.1¢. Mkt cap $137.8M.

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