Highlights

  • Definitive agreements signed with Beach Energy for a $205 million portfolio farmout.
  • Consideration of $25 million cash and a $180 million gross carried work program.
  • Funding pathway over about four years for appraisal and Reserve conversion.
  • Elixir retains about 1,193 km² of net acreage, such as the Diona JV sub block.

Elixir Energy Limited (ASX:EXR) signed definitive agreements with Beach Energy Limited (ASX: BPT) for a strategic farmout of half of Elixir’s working interests, plus operatorship where applicable, across its Taroom Trough permits in Queensland’s Bowen Basin. The total transaction value is $205 million, comprising $25 million in cash and a $180 million gross carried work program. The Diona JV sub block is excluded. Elixir said the deal followed a competitive process in which it received multiple offers.

How the Transaction Is Arranged

Under the agreements, Beach will provide $25 million in cash on completion, plus a fully carried appraisal program with gross expenditure of $180 million, of which Elixir’s share is $90 million. The campaign must be executed within four years and is projected to include exploration and appraisal drilling, completion and testing of new lateral wells, geological, geotechnical and geophysical studies, 2D/3D seismic acquisition and processing, operating costs and preparatory development works.

After completion, Elixir’s interest in ATP2056 and ATP2057 will move from 50% to 25%, while its interest in ATP2044 and ATP2077-A/B will move from 100% to 50%, with Beach becoming operator of those two permits. Elixir’s 49% operated interest in the ATP2077 Diona sub block is unchanged. The parties have also agreed an Area of Mutual Interest covering new acreage, with Beach as operator.

Purpose of the Agreement

Elixir’s Board described the deal as a pathway to accelerate development of its Taroom Trough portfolio while preserving shareholder exposure to future upside and reducing corporate dilution. The business stated the transaction provides funding certainty for its corporate and operational requirements for about four years and introduces a partner with extensive Australian gas production and east coast gas marketing experience.

According to Elixir, the deal implies a value of about $118,700 per BCFe of the 2C contingent gas resources acquired by Beach, roughly three times its own calculation of the market’s current implied value. Managing Director Stuart Nicholls described the farmout as one of the highest-valued exploration and appraisal deals in recent Australian oil and gas history. Initial appraisal drilling may include the Lorelle-4H well and the Daydream-3/3H wells, using new 3D seismic acquired by Shell across Elixir’s permits, with final locations subject to Beach’s discretion.

Conditions & Timing

The transaction has an effective date of 22 October 2026 and is projected to complete in the second half of FY27. Completion is subject to several conditions, such as Ministerial approval, a waiver or approval from the ACCC, completion of Elixir’s farm-in to ATP2056, and a waiver of its joint venture partner’s pre-emption rights.

The farmout does not involve the issue of securities or any changes to Elixir’s Board or management, and it is not subject to shareholder approval. On completion, Beach will join Elixir in the existing ATP2056 and ATP2057 joint ventures with Santos, and new joint ventures will be formed at ATP2044 and ATP2077-A/B.

What the Update Establishes

The Beach farmout gives Elixir a funded four-year appraisal program and upfront cash while reducing its reliance on shareholder capital. In return, Elixir gives up half of its interests across most of its Taroom Trough permits, while keeping its operated Diona position. Satisfaction of the conditions precedent, such as regulatory approvals, and the start of the carried appraisal program are the principal next steps.