Key Highlights

• Xstate-led joint venture has been named preferred tenderer for Block PLR2026-1-7 in Queensland.

• Xstate will hold a 25% interest and act as the initial operator alongside three equal joint-venture partners.

• The block covers approximately 305 sq km on the eastern side of the Taroom Trough.

• The award remains subject to Queensland Government processes including Native Title and an Environmental Authority.

Xstate Resources Limited (ASX:XST) is set to take the operating role in a new four-party exploration venture in Queensland’s Taroom Trough. The joint venture has been awarded preferred-tenderer status for Block PLR2026-1-7, a roughly 305 sq km area on the eastern flank of the basin. Xstate will hold 25% alongside Amplitude Energy, Beetaloo Energy and Eastern States Energy, with the first work focused on seismic processing and early geological and geophysical activity.

Operator Role Gives Xstate the Lead in Early Work

Each participant in the Taroom joint venture will hold a 25% working interest, while Xstate will serve as initial operator. The block lies between Condamine and Miles on the Western Downs and forms part of the broader Surat over Bowen Basin system.

As operator, Xstate will have a central role in coordinating the early exploration program and joint-venture activity, although material decisions and expenditure remain subject to the Partnership structure.

Block 7 Targets Stacked Permian Reservoirs

The acreage contains stacked Permian reservoir intervals within a basin-centred gas play. Xstate’s announcement notes that recent Taroom Trough exploration has encountered gas, associated liquids and light crude oil.

Block 7 is adjacent and along trend from Omega Oil & Gas’ Canyon project and is close to pipeline infrastructure and services. Those features provide the basis for the joint venture’s initial geological assessment.

Government Processes Still Need to Be Completed

Preferred-tenderer status does not mean the exploration tenure is fully granted. Xstate said the award remains subject to completion of Queensland Government processes, including initiation of a Native Title process and lodgement of an Environmental Authority.

The initial work commitment is expected to include seismic processing and early-stage geological and geophysical activities once the required processes allow work to proceed.

Risks to Consider

The block is at an early exploration stage and there is no assurance that an economic oil or gas resource will be established. Government, Native Title and environmental processes can affect timing. As operator, Xstate also carries execution responsibilities, while future appraisal and development could require substantially greater Capital than the initial work program.

What to Watch Next

Finalisation of the government process, Native Title and environmental steps, commencement of seismic and geological work and the design of any future appraisal drilling will determine the pace of the Taroom program.