Elixir Energy Limited

Release Highlights:

• Elixir Energy Limited has successfully raised AUD 6.25 million through an oversubscribed share placement, issuing 62.5 million new shares to institutional and sophisticated investors at a price of 10 cents per share. Additionally, participants in the placement will receive one EXROB option for every four shares issued, which have an exercise price of 12 cents and expire on October 17, 2026.
• The capital raised will be utilized to support the next phases of the Grandis Project. This includes managing potential contingencies arising from the upcoming multiple stage stimulation and flow testing program at the Daydream-2 well, ordering long lead items for the next well, and strengthening the company’s position for potential farm-out negotiations after the flow testing phase.
• Taylor Collison Limited and Originate Capital Pty Ltd served as Joint Lead Managers for the placement. The issuance of the new shares, expected to occur on July 31, 2024, has introduced several new institutional investors to Elixir’s register.

Release Highlights:

• Elixir Energy is set to recommence the Daydream-2 program in approximately two weeks, beginning with the milling of a plug and flow testing of the Lorelle Sandstone, which had previously flowed gas at a stabilized rate of 1.3 million standard cubic feet per day (MMscfd).
• The next phase will include the perforation and stimulation of three sandstone zones and two coal zones in the Permian section, with progressive cleanup and flow testing aimed at proving up contingent resources and achieving a combined flow rate of over 2.5 MMscfd.
• Elixir is working closely with Condor Energy and neighboring operators to coordinate the optimal use of the coil tubing unit and other key equipment, aiming to conclude the program within a month and highlighting the significant investments being made in the Taroom Trough’s gas potential.

Video Highlights:

• Elixir Energy’s CEO, Neil Young, announced that the company is set to begin the next phase of the Daydream-2 program at the Grandis Project in Queensland’s Taroom Trough in about two weeks. This phase will involve using a new coil tubing unit (CTU) for flow testing, which has been imported from New Zealand by prime contractor Condor Energy to handle the high pressure and depths of the Taroom Trough.
• The CTU will first be deployed to mill out the plug above the Lorelle Sandstone, which previously achieved a stabilized gas flow rate of 1.3 million standard cubic feet per day (MMscfd). Following this, the next stage will involve perforating and stimulating three sandstone and two coal zones in the Permian section, with a cleanup and flow testing period to follow, lasting a few weeks.
• The initial test will focus on independently flow testing the uppermost coal section to confirm contingent resources. Afterward, all six zones will be tested together with a target combined flow rate of 2.5 MMscfd, representing just 19% of the total gas-bearing zones and suggesting significant potential for higher future flow rates. Young highlighted the company’s progress and the substantial investments in realizing the Taroom Trough’s potential, working closely with Condor Energy and a neighboring operator to optimize resource use and adapt to geological and operational factors.
  

Presentation Highlights:

• Elixir Energy is poised to meet the imminent gas supply crunch in East Coast Australia, where storage is at unusually low levels. LNG imports, expected to cost around AUD 20/gigajoule (GJ), will become essential, particularly from Port Kembla and potentially other regions. setting a new marginal price for gas in the region.
• Governments are increasingly recognizing the challenges of the energy transition and the necessity of gas, with current prices expected to remain high. Leveraging its Grandis Gas Project and early successes, Elixir aims to enhance gas flow rates and address supply issues, supported by significant investment and ongoing drilling programs in the Taroom Trough.
• The Taroom Trough, with its vast gas resources, is critical towards alleviating the growing demand-supply gap in East Coast Australia’s gas market. Its proximity to the Wallumbilla gas hub, minimal pipeline costs, and established community acceptance are all key to its geostrategic location.

Webinar Highlights:

• Elixir Energy Limited invites shareholders to an investor webinar on MarketOpen Direct Connect on July 9, 2024, at 12:00 pm AEST/10:00 am AWST.
• Managing Director Neil Young and Chief Geoscientist Greg Channon will provide updates on the Daydream-2 stimulation and flow testing program, followed by a Q&A session.
• The live webinar can be accessed via Zoom, and a recorded copy will be available afterward. Registration is free through the provided link. https://us06web.zoom.us/webinar/register/WN_OlNmv8tMTAOVLzEcxj8byg

Release Highlights:

• Elixir Energy is pleased to announce that it’s Nomgon IX CBM Pilot Plant in the South Gobi Basin of Mongolia has reached a stable maximum water production rate of around 280 barrels per day, with a total production of over 73,000 barrels of water since its inception.
• The field is experiencing a steady decrease in reservoir pressure at a rate of 5 psi per month, and if this trend continues, gas desorption breakthrough is expected before the end of 2024.
• The company has decided that the two additional pilot wells planned for 2024 are not necessary, and misting devices will be added to the water disposal pond to enhance evaporation efficiency.

Release Highlights:

• Elixir Energy Limited is pleased to announce its appointment by the Queensland Government as the preferred tenderer for the new exploration area PLR2023-1-7, which is adjacent to the Company’s Project Grandis in the Taroom Trough and is prospective for both deep and shallow gas.
• Covering 526 square kilometers and divided into three separate geographical areas, PLR2023-1-7 represents a 14% increase in Elixir’s acreage within the Taroom Trough, which has a 2C contingent resource booking of 1,297 Bcf as of May 29, 2024.
• Elixir will now proceed to obtain an Environmental Authority (EA) and complete any required native title process before being granted the final Authority to Prospect (ATP), with technical studies already begun to address potential resources, drill targets, and partners for the new license area.

Release Highlights:

• Elixir Energy Limited has appointed Condor Energy, a leading Australian well services company, to complete the remaining stimulation stages of its 100% owned Grandis project following recent operational issues in the stimulation phase of the Daydream-2 appraisal program, with engaged work expected to recommence in late July or early August as the availability of coil tubing equipment becomes clearer.
• The wellbore has been cleared of debris associated with the lodged setting mechanism of the lowermost bridge plug, and the Lorelle Sandstone, which previously flowed at a stabilized rate of 1.3 million cubic feet per day pre-stimulation, will be part of the multi-zone flow testing operations set to occur in August.
• Elixir’s Managing Director, Mr. Neil Young, expressed confidence in the resumption of the stimulation program at Daydream-2, highlighting the collaboration with Condor Energy’s highly experienced team to ensure successful outcomes, with the aim to flow test all the target zones of the well next month.

Arrowhead is updating its coverage on Elixir Energy (Elixir, EXR, or the company) with a fair value bracket of AUD 0.30 per share to AUD 0.42 per share (share price on May 29, 2024: AUD 0.12) based on a Relative Valuation method.

• Elixir drilled its appraisal well, Daydream-2 in Q4 2023; laboratory analysis of cutting
  samples revealed the presence of clay coatings on certain sands at depths of ~4,200 metres (m), which preserved porosity and permeability at this depth; this resulted in an increase in prospective resources in ATP 2044 to 3.6 Tcf (2U).
• May 2024, Elixir upgraded its 2C contingent resources for its ATP 2044 in Queensland to 1,297 billion cubic feet, an increase of 328%.
• In April 2024, Elixir commenced a six-stage stimulation program, targeting two coal zones, three tight gas zones and the Lorelle Sandstone; Halliburton was hired as the lead contractor for the stimulation program, this program is currently in abeyance and is expected to resume in July.
• In March 2024, Elixir completed the Diagnostic Fracture Integrity Tests (DFITs) at Daydream-2, which
  provided useful data for the final design of the stimulation program, followed by initial flow tests that demonstrated a stabilized flow rate from the Lorellem Sandstone without stimulation.
• EXR raised AUD 6.5mn (before costs) through the issue of new shares via a placement to institutional and sophisticated investors for the Daydream-2 project.
• EXR entered an information sharing agreement with Origin Energy Limited (Origin) in November 2023, to provide Origin with information on Carbon Capture and Storage (CCS) garnered from the well, in return for AUD 1mn paid H1 2024 and all incremental costs involved.
• EXR is entitled to be paid a 48.5% cash credit as a Federal R&D incentive – based on the total costs of the well (including stimulation and testing).

News Release:

• Elixir Energy Limited is pleased to announce Daydream-2 drilling has led to significant material increase of contingent resources for its 100% owned ATP 2044 (Project Grandis) in Queensland, Australia.
• Independent expert certifies 2C increase of 327% from 395 billion cubic feet (BCF) to 1,297 BCF.
• Elixir’s appraisal program resumes in the next month, with final results post stimulation and flow testing in the coming months to feed into another independent certification.