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- Elixir Energy (ASX:EXR) reports two gas-bearing sections downhole its 4200-metre Daydream-2 well
- The company has fracking projects in both Mongolia and Queensland
- Elixir is set to investigate gassy coal targets and a deep sandstone reservoir that produced a flare at surface, in the new year
- Shares last traded at 8.8 cents
ASX gas explorer microcap Elixir Energy (ASX:EXR) has updated the market on its Grandis gas project in Queensland – with drillers logging 154 metres of net gas pay.
Seventy-eight metres was logged in the Kianga Formation while another 76 was logged in the Back Creek Group for a total of 154 metres.
Overall well depth runs to a total of 4200 metres. At that depth, the company recently hit an unexpected pocket of sandstone gas which produced a flare at surface.
Tantalising for any gas driller, the company is to investigate this geological lead further in 2024.
Coal targets also on radar
Both Kianga and Back Creek Group refer to Permian-age sandstones underground at Grandis.
Those targets join already known gassy coal targets, interpreted to be 65 metres of net pay, which the company Is hopeful can add to net pay and boost production potential.
Exploration work targeting gassy coals will also kick off in 2024.
Elixir might be more familiar to energy watchers as a Mongolian explorer, where it is operating the Norton IX coal bed methane project. It also has plans to produce hydrogen in the Gobi desert, but, that’s a while off.
Meanwhile, Elixir has had its eye on Queensland since 2022.
Pivot to QLD
EXR Managing Director Neil Young noted at the 2022 Good Oil conference that the company’s Mongolian operations were still a focus, but that his eyes were really on QLD.
That, he said, would be a more expensive venture – perhaps evidenced by the fact the company has very recently had to shake the tin.
The company today wrote that the latest operations at Grandis have come in below budget. That wasn’t enough to stop some HotCopper users grumbling about Elixir’s recent funding raise.
Stock being punished
And not everyone is sold on the stock: despite posting relatively good results today, Elixir shares were down just over a per cent at midday trade AEDT.
“Recording 154 metres of net pay at Daydream-2 is a great result – exceeding our pre-drill expectations – and in due course our fully funded plans aim to add the coal zones to this net pay category,” Mr Young said.
“Encountering a permeable “conventional” sandstone reservoir at depths of 4,200 metres has been a very exciting recent and unexpected development and this zone will be a key focus for next year’s stimulation and flow testing operations”.
EXR shares last traded at 8.8 cents.
