Highlights

• Elixir agreed to farm out half of specified Taroom Trough working interests.

• The transaction comprised AUD 25 million cash and AUD 180 million of gross carried work.

• The company retained its operated Diona joint venture sub-block outside the transaction.

• Elixir expected the arrangement to support a four-year appraisal pathway.

Elixir Energy (ASX:EXR) explores gas resources in Queensland's Taroom Trough, where its acreage lies near established pipelines and gas-market infrastructure. The company's stated objective is to appraise contingent gas resources and convert a substantial portion into reserves before development and production. Its 23 October 2026 farm-out announcement introduced a funding and operating framework for that work while preserving exposure to the retained portfolio.

Half Interests Transfer under the Proposed Deal

The company entered definitive agreements to farm out half of its working interests across specified permits, together with operatorship where applicable. The transaction covered ATP 2056, ATP 2057, ATP 2044 and ATP 2077A-B, excluding the Diona joint venture sub-block.

Cash consideration was AUD 25 million. The announcement also described AUD 180 million of gross carried appraisal and operating expenditure, producing its stated total transaction value of AUD 205 million.

The gross expenditure figure covers work across the joint venture interests. Of that program, AUD 90 million represented Elixir's share of carried exploration, appraisal and operating costs. This work commitment was separate from the cash consideration payable at completion.

Four-year Work Program Targets Appraisal

The planned program included exploration and appraisal drilling, completion and testing of lateral wells, geological and geotechnical studies, seismic acquisition and processing, operating costs and preparatory development work.

The company expected these activities to reduce its capital requirements over approximately four years. The program's purpose was to improve understanding of the acreage and support conversion of contingent resources into reserves.

Planned seismic interpretation would help identify drilling locations. Potential targets mentioned in the announcement included Lorelle-4H and Daydream-3/3H, with the selection dependent on the technical work and subsequent program decisions.

Retained Acreage Preserves Further Exposure

The Diona joint venture remained outside the farm-out, allowing Elixir to retain its operated position there. It also kept its remaining interests across the transferred permits.

Elixir's interests in ATP 2056 and ATP 2057 would fall from 50% to 25%, while its interests in ATP 2044 and ATP 2077A-B would fall from 100% to 50%. Its 49% interest and operatorship in the Diona sub-block would remain unchanged.

Beyond existing holdings, an area-of-mutual-interest agreement established participation rights for additional acreage. Newly acquired acreage could be shared on a 50:50 basis, while new release bids could involve a 65:35 split between the incoming operator and Elixir, subject to the stated arrangements.

Completion and Resource Outcomes Remain Separate

The transaction was effective from 22 October 2026 and expected to complete in the second half of FY27. The associated agreements contained conditions precedent, including regulatory matters and applicable pre-emptive rights.

The funding structure supported appraisal activity but did not itself demonstrate commercial production or establish reserves. Those outcomes depended on drilling, well testing, interpretation and subsequent development decisions.

The acreage's proximity to the Wallumbilla Gas Hub and other infrastructure provided operating context. Establishing which reservoirs and locations could support development remained the purpose of the next work phase, rather than a result already delivered by signing the farm-out.