Elixir winds up QLD operations with five of six zones flowing gas – but shares plummet -50%

Note: An earlier version of this article used a different headline; the share price has been updated as well as HotCopper users’ sentiment.

Elixir Energy (ASX:EXR) is all but guaranteed to become a future gas producer with 5 of 6 zones part of the Daydream-2 well flowing gas.

However, the company vastly failed to match gas flow rate expectations held by HotCopper users. Multiple commenters described the news as a poor outcome; shares were down -53% to 7.7cps in the second hour of trade on Tuesday.

Elixir said on Tuesday that the Daydream-2 will be “retained as a future gas producer.” However, the company also pointed to a stabilised flow rate “less than previously measured but remediable in future wells.”

“This was likely caused by the multiple open and closures of the well during recent operations, or by adverse reactions to fluids introduced into the wellbore,” the company elaborated.

Elixir will now go about securing a retention lease for the project landholding – HotCopper commentary be damned.

“In Queensland this is called a Potential Commercial Area – PCA – which has a maximum term of 15 years,” Elixir wrote on Tuesday.

The company – an absolute energy smallcap darling in its own right – recently pivoted to QLD’s Taroom Trough away from Mongolia where it previously based its main operations.

Earlier this year, energy supermajor Shell flared gas right next door. A local group of Elixir loyalists on a platform this finance journalist is aware of regularly use NASA’s Copernicus satellite to detect small fires at the company’s acreage to track the progress of flaring.

Such is the enthusiasm this stock attracts. But when expectations aren’t matched, the feedback can be vicious.

“Back to Mongolia! Lol!,” user Booksf wrote, expressing disappointment with the company’s flow rates posted on Tuesday.

“The Daydream-2 appraisal program has massively exceeded our expectations of more than 2 years ago when we acquired Project Grandis,” EXR chief Neil Young said.

“Our work – combined with that of our various neighbours – is opening up vitally needed and very material gas resources for Gladstone, Queensland and Australia.”

EXR last traded at 7.7cps.

Join the discussion: See what HotCopper users are saying about Elixir Energy and be part of the conversations that move the markets.