Highlights

  • Elixir Energy has commenced the completion and testing phase of the Lorelle-3H appraisal well in Queensland's Taroom Trough.
  • A Diagnostic Fracture Injection Test (DFIT) is being undertaken to measure reservoir pressure and support final stimulation design.
  • Halliburton, SLB and Corelab have largely completed the design of an 11-stage stimulation program using 6 million pounds of proppant.
  • Production testing is expected to begin in late June, with an IP30 production curve targeted by the end of July 2026.
  • Lorelle-3H contains 1,033 metres of net gas-condensate pay in the target Tinowon 'Dunk' Sandstone interval.

Elixir Energy Ltd (ASX:EXR) shares traded 1.90% higher at AUD 0.11 during the afternoon session on 4 June 2026 after the company provided a progress update on the high-impact Lorelle-3H appraisal well in Queensland's Taroom Trough. Investors appeared encouraged by the commencement of the well's completion and testing phase, which represents a significant step toward evaluating the commercial potential of the project.

The stock has delivered a gain of approximately 256.67% over the past year, reflecting growing market attention on Elixir's substantial acreage position in the Taroom Trough and ongoing appraisal activities aimed at advancing its gas and condensate resources.

The latest announcement outlined the next stages of operations at Lorelle-3H, including reservoir pressure testing, multi-stage stimulation, flow-back activities and a planned 30-day production test. The company believes these activities will provide critical data to assess whether the Tinowon 'Dunk' Sandstone can support future commercial development.

Testing Program Begins at Lorelle-3H

The immediate focus for Elixir is the Diagnostic Fracture Injection Test, commonly known as a DFIT, which commenced on 4 June.

The operation is being conducted at the toe end of the horizontal Lorelle-3H well and is designed to determine reservoir pressure characteristics while gathering additional information needed to finalise the stimulation program.

Reservoir pressure data is considered an important component in evaluating the behaviour of the target formation and assists engineers in refining stimulation parameters before larger-scale operations commence.

According to the company, information gathered from the DFIT will contribute directly to the final design of the full stimulation and testing campaign.

The DFIT is expected to run between 4 June and 6 June, marking the first stage of a broader operational schedule planned for the coming months.

11-Stage Stimulation Program Moves Toward Execution

Elixir has spent several months working alongside Halliburton, SLB and Corelab to analyse physical core samples and petrophysical information collected from the Lorelle-3 and Lorelle-3H wells.

That work has now largely been completed and has resulted in the design of a multi-stage hydraulic stimulation program tailored to the characteristics of the target reservoir.

The planned operation consists of 11 stimulation stages in addition to the DFIT and will seek to place approximately 6 million pounds, or around 2,720 tonnes, of proppant into the reservoir.

The stimulation program will target the 1,033-metre interval of net gas-condensate pay identified within the horizontal section of Lorelle-3H.

The company reported that average porosity across this interval measured 11.2%, with some sections reaching as high as 18%, data that has been incorporated into the final stimulation design.

Halliburton has been awarded an integrated services contract to execute the stimulation campaign, which is expected to commence during the week beginning 15 June, subject to operational conditions.

Following completion of the stimulation activities, the well will undergo a flow-back period of approximately three to five days to monitor well performance and evaluate flowing conditions.

Commercial Development Potential Under Assessment

A key objective of the Lorelle-3H program is to determine whether gas and condensate can be produced at rates and pressures capable of supporting a future commercial development.

The testing campaign has been structured around several technical objectives that extend beyond simply establishing flow rates.

Management intends to assess whether multi-stage stimulated horizontal wells can recover commercial quantities of Hydrocarbons from the Tinowon 'Dunk' Sandstone while also collecting information needed for future development planning.

The program is expected to provide valuable data relating to gas and condensate compositions, fluid ratios, pressure behaviour and reservoir performance.

These measurements are intended to support future engineering studies and assist in evaluating potential development scenarios across the broader project area.

Should the testing program generate favourable results, the data may contribute to future reserve assessment work associated with the company's existing contingent resources.

Production Testing Planned for Late June

Once the stimulation and flow-back phases have been completed, Elixir plans to install final completion equipment before commencing formal production testing.

The company indicated that a workover rig may be mobilised to install a 2-7/8-inch tubing string designed to improve fluid velocity and manage bottom-hole pressure conditions.

After final completion work is finished, the well will enter an official production testing phase expected to begin during the week commencing 22 June.

SLB and EnServe have collaborated on the testing design and have incorporated learnings from comparable operations when developing the flow-back and production testing program.

The testing phase is expected to run for approximately 30 days.

At the conclusion of the program, Elixir aims to generate an IP30 production curve, a commonly used industry metric that measures average production performance over the first 30 days of operation.

The company currently expects the IP30 data set to be available by the end of July 2026.

Management believes this information will provide a high-quality data package capable of addressing the primary technical objectives established for the well.

Lorelle-3H Represents a Key Appraisal Milestone

Lorelle-3 was drilled in two stages as part of Elixir's appraisal strategy within ATP2056.

The initial vertical pilot hole reached a total depth of 3,580 metres and included an expanded evaluation program covering multiple Permian sandstone reservoirs within the Taroom Trough.

According to the company, the evaluation identified 148 metres of net gas-condensate pay and highlighted several prospective appraisal targets.

The second phase involved drilling a 1,157-metre horizontal sidetrack into the Tinowon 'Dunk' Sandstone, which serves as the primary target interval.

The horizontal section was subsequently cased and suspended pending stimulation and production testing.

Data obtained from drilling, logging, coring and laboratory studies has since been used to design the current completion and testing program.

Elixir stated that the Horizontal Well and flow test are intended to demonstrate commercial gas and condensate production from the Basin-centred gas play and potentially support future reserve conversion activities.

Large Resource Position Supports Long-Term Strategy

Elixir Energy remains the largest acreage holder in the Taroom Trough, a region viewed by the company as a significant basin-centred gas opportunity.

The company currently holds independently certified 2C contingent gas resources of approximately 3.5 trillion cubic feet.

Its acreage position benefits from proximity to existing energy infrastructure, including the Wallumbilla Gas Hub, gas transmission pipelines, LNG export facilities and refining capacity.

The company believes this infrastructure advantage could support future development Options should appraisal activities continue to progress.

In addition, Elixir noted that qualifying expenditures associated with Lorelle-3, including drilling, coring, logging, analysis, stimulation and testing activities, may be eligible for refunds of up to 48.5% under Australia's Research and Development Tax Incentive program.

What This Means for Investors

Elixir Energy's latest update marks the transition of Lorelle-3H from drilling and evaluation into the critical completion and testing phase. The commencement of the DFIT, finalisation of an 11-stage stimulation design and the planned production testing program provide a clearer pathway toward assessing the commercial potential of the Tinowon 'Dunk' Sandstone.

The market's positive reaction appears linked to the progression of a well that management considers important for evaluating gas and condensate production potential within the Taroom Trough. Investors are likely to focus on upcoming operational milestones, including stimulation activities in mid-June, production testing later in the month and the anticipated release of IP30 production data by the end of July.