Elixir’s Contingent Gas Resources Surge 68% After Santos Farmin Deal
Elixir Energy has expanded its footprint in Queensland's Taroom Trough through a farmin deal with Santos, boosting its contingent gas resources by 68% and launching a $9 million equity raise to fund upcoming exploration activities.
- Farmin agreement with Santos grants Elixir 50% interest in ATP 2056 and ATP 2057
- Contingent resources increase to 3.0 trillion cubic feet equivalent (2C net to Elixir)
- Up to $9 million equity capital raising planned to fund drilling and seismic acquisition
- Lorelle-3 appraisal well scheduled for Q3 2025 to evaluate gas and condensate potential
- Deal highly accretive on contingent resource per share basis
Strategic Expansion in the Taroom Trough
Elixir Energy has announced a significant expansion of its Grandis Project in Queensland’s Taroom Trough, securing a 50% working interest in two additional exploration permits, ATP 2056 and ATP 2057, through farmout agreements with Santos Ltd. This move not only broadens Elixir’s acreage but also enhances its resource base substantially, positioning the company for a stronger role in Australia’s onshore gas sector.
The newly acquired permits extend the basin centred gas (BCG) play that Elixir has been developing in ATP 2044, with ATP 2056 notably containing independently certified contingent resources of 1.2 trillion cubic feet equivalent (TCFE). This addition lifts Elixir’s total 2C contingent resources in the Taroom Trough to 3.0 TCFE, marking a 68% increase and underscoring the material scale of the deal.
Funding the Next Phase of Exploration
To finance the farmin work, Elixir is undertaking an equity capital raising of up to $9 million, comprising a $7 million placement to institutional and sophisticated investors and a $2 million shareholder placement subject to approval. The placement shares are priced at 3.5 cents each, with attached listed options exercisable at 12 cents, reflecting a discount to recent trading prices but signaling strong investor appetite as demand exceeded the placement size.
The capital raised will primarily fund the drilling of an appraisal well, Lorelle-3, planned for the third quarter of 2025 in ATP 2056, alongside 200 kilometres of 2D seismic acquisition in ATP 2057 scheduled for 2026. Lorelle-3 aims to apply advanced evaluation techniques to optimize horizontal lateral placement and assess condensate content, which is expected to be higher than in previous wells, potentially enhancing project economics.
Operational and Strategic Synergies
Elixir will operate the farmin programs, with Santos resuming operatorship after completion. The partnership leverages Santos’ reputation as a premier onshore operator in Australia, bringing operational expertise and potential long-term collaboration benefits. The new permits’ proximity to existing ATP 2044 and ATP 2077 blocks offers clear synergies, facilitating integrated development strategies and infrastructure planning.
Independent certification by ERCE Australia Pty Ltd confirms the contingent resources are classified as 'development unclarified,' indicating that while the resource base is substantial, further work is needed to assess commercial viability. Elixir’s management remains optimistic, emphasizing the accretive nature of the deal on a per-share resource basis and the potential to unlock value through upcoming appraisal activities.
Looking Ahead
With the capital raise underway and drilling plans advancing, Elixir is poised to deepen its understanding of the Taroom Trough’s resource potential. The company’s approach balances technical rigor with strategic partnerships, aiming to de-risk the resource and progress towards development decisions. Market participants will be watching closely as Lorelle-3’s results and seismic data could significantly influence Elixir’s trajectory in the competitive Australian gas market.
Bottom Line?
Elixir’s expanded Taroom Trough position and fresh capital set the stage for a pivotal year of appraisal and resource validation.
Questions in the middle?
- What will Lorelle-3 reveal about condensate content and commercial flow rates?
- How will Santos’ operatorship influence development timelines post-farmin work?
- What are the potential market reactions to the dilution from the $9 million capital raise?
