What Is Driving Xstate Resources (ASX:XST) Shares Up 10% Today?

Sonal Goyal

23 October 2026 01:21 PM AEDT

What Is Driving Xstate Resources (ASX:XST) Shares Up 10% Today?

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Key Highlights

Xstate shares rose 10.00% to $0.011 during the trading session on 23 October 2026, while the S&P/ASX 200 was down 0.35%.
The September 2026 quarterly report dated 21 October 2026 detailed a Static Gradient Survey at Diona-1, with a fluid level of about 2,325m TVD.
Cash at 30 September 2026 was A$0.676m, and a joint venture including Xstate was selected as preferred tenderer for ATP2087.

Shares in Xstate Resources Limited (ASX:XST) rose 10.00% to $0.011 during the trading session on 23 October 2026, as at 12:04 pm, while the S&P/ASX 200 stood at 8,762.60, down 0.35% (30.60 points) at the same time. Xstate is an ASX-listed oil and gas explorer focused on Taroom Trough projects in Queensland. In its quarterly activities report dated 21 October 2026, covering the quarter ended 30 September 2026, the company reported results from a pressure and fluid level survey at its Diona-1 well and a new Taroom Trough tenement.

Static Gradient Survey at Diona-1

In its report dated 21 October 2026, Xstate said the operator completed a Static Gradient Survey at Diona-1 during the September 2026 quarter to measure pressure and fluid level under static well conditions. The survey recorded a fluid level of approximately 2,325m TVD, more than 1,800m below the level recorded during earlier flowback operations, with the wellbore above that depth gas filled.

The company said the liquid level is now interpreted to be below the top of the Black Alley/Bandanna perforated interval. The survey also recorded a wellhead pressure of approximately 3,235psi, compared with approximately 1,600psi when the well was shut in, and a maximum downhole pressure of 4,139psi at 2,411m TVD. Flowback at Diona-1 remains incomplete, and the timing of resuming flow testing remains under review.

Preferred Tenderer Status for ATP2087

The 21 October 2026 report also covered a subsequent event. On 2 October 2026, Xstate announced that a joint venture comprising Xstate, Amplitude Energy Limited, Beetaloo Energy Limited and Eastern States Energy Pty Ltd had been selected as preferred tenderer for block PLR2026-1-7, referred to as ATP2087, under the Queensland Government's 2026 public land release. Each participant is to hold a 25% interest, subject to grant of the permit.

The company described ATP2087 as lying on the eastern margin of the Taroom Trough, immediately adjacent to the APLNG-operated Condabri coal seam gas field. The joint venture plans to assess coal seam gas potential early in the proposed work program, and expects work to start in early 2027. Results reported by other operators nearby provide regional context but are not necessarily indicative of results within the acreage.

Cash Position and Quarterly Spending

Xstate reported that its cash balance at the end of the September 2026 quarter was A$0.676m, down from A$1.248m at the end of the previous quarter. Receivables of $300,000 are expected to be realised in the December quarter.

The Appendix 5B showed net cash used in operating activities of A$411,000 for the quarter and exploration and evaluation payments of A$285,000, giving estimated funding of 0.97 quarters based on those outgoings. The company stated that forecast activity is significantly lower than the quarter's spend, which included Diona-1 activity, and that it retains the option to raise equity for future approved work programmes.

About the Company and Business Overview

Xstate Resources Limited (ASX: XST) is listed on the Australian Securities Exchange and has its office at Suite 1101, Level 11, 109 Pitt Street, Sydney, New South Wales. The company describes itself as focused on the oil and gas sector, with its activities centred on projects in the Taroom Trough in Queensland.

Its tenement list at 30 September 2026 shows two exploration interests in the Surat Bowen Basin, Queensland: a 51% working interest in ATP2077, which contains the Diona block, and a 25% interest in ATP2087, which remains subject to grant.

Related Sector Context

Xstate operates in the oil and gas exploration segment of the energy sector, where companies drill wells and test reservoirs to establish whether commercially significant flows can be achieved.

On the broader market, the S&P/ASX 200 stood at 8,762.60 at 12:04 pm on 23 October 2026, down 0.35%, while Xstate shares were trading higher at the same point in the session.

Risks to Weigh In

The company's report states that Diona flowback is incomplete and that its resumption is pending, so the well's flow performance has not yet been reported.

Funding is another factor evident in the quarterly report. Cash of A$0.676m compares with quarterly outgoings of A$696,000 under the Appendix 5B calculation. ATP2087 is subject to grant of the permit, and the company cautioned that results reported by other operators are not necessarily indicative of results within its own acreage.

Catalysts on Watch

The report points to the resumption of flowback and flow testing at Diona-1. It also notes the grant of ATP2087, with work on the block expected from early 2027, and realisation of $300,000 of receivables in the December quarter.

Where Things Stand

Xstate shares rose 10.00% to $0.011 during the session on 23 October 2026, with the S&P/ASX 200 down 0.35% at 8,762.60. The company's latest update on file, its quarterly report dated 21 October 2026, set out the Diona-1 survey findings, the ATP2087 preferred tenderer status and a September 2026 quarter-end cash balance of A$0.676m.

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