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Highlights

  • Xstate Resources’ Diona-1 well reached 2,479m, intersecting both primary and secondary target formations.
  • The Permian section revealed a 181m overpressured gas interval with confirmed hydrocarbon indications.
  • Wireline logging will commence upon reaching a final target depth of approximately 2,530m.

Xstate Resources Limited (ASX:XST) is an Australian oil and gas company holding 51% of ATP 2077, with Elixir Energy (ASX:EXR) owning Blocks A and B. Today, XST has announced an update on drilling operations at the Diona-1 well within the Diona block of ATP2077 in the Surat-Bowen Basin, Queensland.

As of the update, the Diona-1 well had reached a depth of 2,479m, drilling through both primary and secondary targets. The primary Jurassic target in the Showgrounds Sandstone was found to be well developed but non-hydrocarbon bearing. Upon entering the Permian section, the well encountered a 181m Permian-to-basement sequence containing hydrocarbons.

The interval contained an overpressured gas column, which caused a kick that necessitated changes to mud weights and gas circulation from the well. Logging While Drilling (LWD) data shows the presence of multiple Permian-aged hydrocarbon-bearing sandstones that will undergo additional logging and testing.

Drilling is progressing toward the final target depth of approximately 2,530m. Once this depth is reached, a wireline logging program will be conducted to collect further data before final interpretation.

Preliminary Findings

Initial observations indicate hydrocarbon presence within the Permian section, subject to confirmation after wireline logging. The 181m overpressured gas interval will be further examined as part of the next evaluation stage.

Managing Director, Andrew Bald, stated:

“The Diona-1 well has proven the presence of (moveable) hydrocarbons across an unanticipated 180m+ (gross) column of the Permian section of this well. We cannot rule out that Diona-1 has intersected the updip edge of the Taroom Basin Centred Gas play, which, if present, could offer us the opportunity to prove up a significantly larger unconventional resource.
The strategy of targeting a multi-stacked play has paid dividends and early signs are that this could be a remarkable outcome for the team and the Company. It is a credit to the geologists and geophysicists who have identified the opportunity. We are all very excited and looking forward to seeing the outcome of the wireline logging.”

About the Diona Project

The Diona Project lies in Queensland’s Surat-Bowen Basin, positioned between the Silver Springs Gas Processing Facility and Waggamba Gas Field. The Diona-1 well targets the Showgrounds, Tinowon, and Wallabella reservoirs. Early indications from the Tinowon and Wallabella formations show hydrocarbon activity.

The project is located near existing infrastructure, with the Waggamba pipeline approximately 100m from the well pad and a valve tie-in point about 1 km away, enabling potential access to nearby facilities.

Diona Prospectivity

The prospect includes a stratigraphic trap potential in the Tinowon and Wallabella Sandstones, which thin toward the west. Its position on a structural feature that extends east toward the Permian source zone supports hydrocarbon migration and accumulation.

Share performance of XST

The company is currently trading at AUD 0.056 per share, stock up by 166.66% from previous close of AUD 0.021