Elixir Energy Lorelle-3H Drilling Results Deliver Record-Breaking Success

Elixir Energy Delivers Outstanding Lorelle-3H Appraisal Results in Landmark Quarter

Elixir Energy has released its Q3-FY26 report, showcasing exceptional technical achievements and strategic positioning in Australia's emerging gas sector. The company successfully completed drilling operations for the Lorelle-3/3H appraisal well, achieved record-breaking lateral drilling in the Taroom Trough, and maintained strong liquidity of $22.3 million heading into critical production testing phases.

The quarter represents a pivotal period for Elixir, with the Elixir Energy Lorelle-3H drilling results significantly exceeding expectations and setting the stage for value-defining flow testing scheduled for the coming months. The company completed its major capital expenditure programme whilst positioning itself at the forefront of Queensland's strategic gas development initiatives.

Record-Breaking Drilling Campaign Delivers Exceptional Results

The Lorelle-3/3H appraisal well has emerged as a standout success, with drilling operations completed on schedule and within budget over 46 days. The vertical pilot hole (Lorelle-3) confirmed multiple hydrocarbon-bearing reservoirs across 148m of total net gas-condensate pay, validating the geological model across primary and secondary targets.

Lorelle-3 Vertical Pilot Results

The horizontal section (Lorelle-3H) achieved extraordinary results, reaching a total depth of 4,477m with a 1,157m lateral section. Furthermore, this makes it the longest lateral ever drilled in the Taroom Trough. Within the Tinowon 'Dunk' Sandstone primary target, the well intersected 1,033m of high-quality net gas-condensate pay with exceptional characteristics.

The well demonstrated superior reservoir characteristics compared to the vertical pilot hole. Additionally, it showed average porosity of 11.2% with maximum porosity reaching 18%. The continuous reservoir units demonstrate enhanced lateral continuity throughout the formation.

"The results of the Lorelle-3 appraisal campaign exceeded our expectations," commented CEO Stuart Nicholls. "These achievements come at a pivotal time, as both the Australian and Queensland Governments sharpen their focus on domestic and regional energy security, highlighting the strategic importance of the Taroom Trough and Elixir's position within it."

Understanding Basin-Centred Gas: Why Elixir's Discovery Matters

Basin-centred gas (BCG) represents an unconventional gas play where hydrocarbons are trapped in low-permeability reservoirs across large geographic areas. Unlike conventional gas fields with distinct structural traps, BCG accumulations require horizontal drilling and stimulation to release commercial production.

Key characteristics of BCG systems include:

• Large resource potential across extensive acreage
• Multiple stacked pay zones reducing drilling risk
• Predictable geology enabling development drilling programmes
• Long-lived production profiles once stimulated

For instance, the Elixir Energy Lorelle-3H drilling results confirm the Taroom Trough exhibits classic BCG characteristics. The results show multiple productive intervals across different formations with consistent reservoir quality extending laterally. Moreover, the significant net pay accumulations are suitable for horizontal development.

This validation supports Elixir's basin-wide resource potential and de-risks future development drilling across its 7,687 BCFe of total contingent resources. The confirmation provides confidence for continued exploration and development activities throughout the region.

Strategic Asset Portfolio Positions Elixir for Growth

Elixir's Taroom Trough portfolio spans multiple permits with significant resource potential positioned in Queensland's premier gas development region. The company maintains strategic operating positions and farm-in arrangements that optimise capital efficiency whilst retaining upside exposure.

Current Contingent Resources Summary

The resource base provides multiple development options, with the Diona-1 well offering potential for rapid monetisation through proximity to existing pipeline infrastructure. The Waggamba to Silver Springs pipeline sits less than 100m from the Diona-1 wellhead, enabling potential early production operations following successful stimulation and testing.

However, this strategic positioning allows for accelerated development timelines compared to greenfield projects. The existing infrastructure reduces capital requirements and shortens time to first gas production.

Market Context: Queensland's Energy Security Focus

The timing of Elixir's technical achievements aligns with heightened government focus on domestic energy security. During the quarter, Queensland Premier David Crisafulli and senior ministers visited the Taroom Trough alongside industry CEOs to announce the upcoming Taroom Development Plan.

Subsequently, they advocated for federal support of the region's development. This political support demonstrates the strategic importance of domestic gas resources in Australia's energy security planning.

Key market developments include:

• 5 new Taroom Trough blocks announced for 2026 acreage tender
• Major operators including Beach Energy and Tri-Star entering the region
• Wallumbillia benchmark pricing at ~$10.35/GJ demonstrating structural supply shortages
• Sustained industry investment in regional gas development

These developments validate the strategic importance of the Taroom Trough and position Elixir's established acreage position for potential value appreciation. As regional development accelerates, early movers may benefit from enhanced asset values and partnership opportunities.

Upcoming Catalysts Set Stage for Value Inflection

Elixir enters a critical catalyst period with two major production testing programmes scheduled for the coming quarter. The company has contracted Halliburton for integrated stimulation services and Enserve/SLB for testing operations, aligning with proven service providers active in the region.

Key Near-Term Milestones:

• April 2026: Diona-1 stimulation and production testing commencing
• June 2026: Lorelle-3H multi-stage fracture stimulation and 30-day production test
• Q4-2026: Potential maiden 2P reserves booking in Taroom Trough
• Q4-2026: Evaluation of early production opportunities at Diona-1

The testing programmes will provide critical production data to support reserve certification and economic assessment of development scenarios. Successful flow rates could trigger rapid progression toward commercial development, particularly at Diona-1 given its pipeline proximity.

In addition, the Elixir Energy Lorelle-3H drilling results have established a strong foundation for these testing programmes. The record-breaking lateral section provides multiple perforation zones for optimal stimulation design.

Strong Financial Position Funds Growth Strategy

Elixir finished the quarter with $22.3 million of total liquidity, providing certainty for completing critical testing phases. This comprises $14.3 million in cash and equivalents plus $8.0 million undrawn R&D facility from Endpoints Capital.

The R&D facility provides up to 80% advance funding on eligible research and development costs. The $10 million facility is secured against AusIndustry Advance Finding refunds covering up to 48.5% of eligible project costs.

Additional financial highlights include:

• $26 million of in-the-money options outstanding (12c strike, October 2026 expiry)
• 218 million options providing potential additional funding
• Completed majority of 2026 capital programme within budget
• Strong director buying with 2.27 million shares purchased on-market during quarter

The financial position provides certainty for completing both Phase 1 (Retention) and Phase 2 (Reserve Definition) of the strategic plan. Furthermore, it maintains optionality for accelerated development programmes based on testing results.

Why Should Investors Follow Elixir Energy?

Elixir Energy has positioned itself as the leading pure-play exposure to the Taroom Trough's emerging gas development opportunity. The Elixir Energy Lorelle-3H drilling results demonstrate the commercial potential of its basin-centred gas strategy whilst government policy support validates the strategic importance of the region.

Key investment differentiators include:

1. Proven Resource Base: 2,792 BCFe of contingent resources with drilling results exceeding expectations
2. Strategic Location: Established position in Queensland's premier gas development region with government support
3. Technical Excellence: Record-breaking drilling results demonstrating superior reservoir quality and lateral continuity
4. Multiple Catalysts: Imminent production testing at two wells with potential for maiden reserves and early production
5. Financial Strength: Fully funded through key value inflection points with additional option proceeds available

The convergence of technical success, favourable market conditions, and strategic government support creates a compelling investment opportunity. As Elixir advances toward commercial gas production in one of Australia's most promising energy basins, investors may benefit from multiple value creation opportunities.

"Elixir Energy has delivered exceptional drilling results that validate its Taroom Trough strategy whilst positioning the company for multiple value catalysts in 2026," analysts note. "With record-breaking lateral drilling, strong financial backing, and imminent production testing, Elixir represents a unique opportunity to participate in Queensland's emerging gas development story."

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