Highlights

  • Xstate Resources continued evaluating the Diona-1 gas well in Queensland’s Surat-Bowen Basin.
  • The well encountered gas, with further testing required to assess flow performance.
  • Xstate holds a 51 per cent interest in the Diona sub-block alongside its joint venture partner.
  • The company continued technical work and resource evaluation activities.
  • Future updates will focus on flow testing, resource assessment and funding requirements.

Xstate Resources Limited (ASX:XST) is an energy exploration company focused on oil and gas Assets in Australia. During 2026, the company continued progressing activities at the Diona sub-block in the Surat-Bowen Basin, with the Diona-1 gas well remaining central to its near-term development activities.

Diona-1 Gas Well Activities

Xstate Resources’ Diona-1 well has been a key focus of the company’s exploration programme. The well was drilled within the Diona sub-block of permit ATP2077, where Xstate holds a 51 per cent interest. The project is operated through a joint venture structure, with Elixir Energy holding the remaining interest.

Gas Flow Testing Progress

The company reported that gas was flowing at surface from Diona-1 during 2026, although testing activities were affected by completion fluid recovery requirements. Additional engineering solutions were being assessed to support further testing and determine the well’s production characteristics.

Technical Evaluation and Resource Assessment

Xstate Resources engaged technical specialists to support assessment of the Diona sub-block. The company is evaluating the geological characteristics of the area and the potential resource implications of the Diona-1 results. Further testing and technical studies are required before broader conclusions can be drawn.

Funding and Capital Management

During 2026, Xstate Resources completed capital raising activities to support appraisal and production testing programmes. Exploration companies require ongoing funding to support technical work, drilling activities and evaluation programmes. Future financial updates will provide further information on funding requirements.

Project Location and Portfolio

The Diona sub-block is located within the Surat-Bowen Basin, a region with established energy infrastructure and exploration activity. Xstate Resources continues to focus its efforts on advancing its Australian energy assets while evaluating opportunities within its portfolio.

Risks and Monitoring Factors

Gas exploration projects involve technical uncertainty, funding requirements and operational risks. A single exploration well may not represent the wider characteristics of an area, and additional testing is required to confirm commercial potential. Future outcomes will depend on flow rates, technical results, approvals and available capital.

Future Areas to Monitor

Future company announcements may provide updates on artificial lift solutions, resumed flow testing, production results, resource certification and quarterly financial information. These developments will provide further insight into the progress of the Diona project.

Key Insights

Xstate Resources’ 2026 activities remain centred on evaluating the Diona-1 gas well and understanding the potential of the Diona sub-block. The company has generated additional technical information through drilling and testing activities, while future progress will depend on further evaluation, funding and operational outcomes.