Elixir Energy Limited

Highlights:

• Elixir Energy is pleased to invite shareholders to attend an investor webinar on The Watchlist, to be held on Tuesday 23rd April 2024, 12:00PM AEST/ 10:00AM AWST.
• CEO and Managing Director Neil Young will provide an update on the Grandis Project.
• Following the presentation, attendees will have the opportunity to ask questions directly during a moderated Q&A session.

Register to view the webinar live on Zoom via this link:
https://blog.the-pick.com.au/webinars/the-watchlist-webinar

Release Highlights:

• Elixir Energy is pleased to announce that the next phase of its Daydream-2 program is underway following the recent successful flow test without stimulation from a depth of 4,200 meters in the Lorelle Sandstone of Queensland.
• Global leader of gas-stimulation services Halliburton commenced the multi-stage stimulation program at Daydream-2, mobilizing its fleet on-site with a total of 16,000 hydraulic horsepower of equipment.
• This program will target two coal zones and three tight gas zones in the Lorelle Sandstone, with flow testing to follow immediately thereafter.

Video Highlights:

• Elixir Energy showcases imminent success with gas play in the Bowen Basin of Queensland, Australia. Recent drilling of the Daydream 2 well has revealed exciting results with potential to substantially increase the project’s resource and commercial viability.
• The Daydream 2 well has revealed significant absorbed gas content in the coal seams. This could further enhance the project’s resource base, with a prospective estimate of 3.6 trillion cubic feet of gas across the greater area.
• The testing program is set to commence, and with the potential for positive news flow in the coming months, EXR presents an attractive opportunity for investors looking to gain exposure to the high-impact gas play in this promising region.

Video Highlights:

• Elixir Energy is on the verge of proving up a significant new gas resource in Queensland’s gas-rich Bowen Basin.
• Positive flow test results from recent drilling offers investors exposure to a potential high-impact gas play as Elixir moves into appraisal phase.
• Elixir is well placed to emerge as a key source of new supply into Australia’s East Coast gas market over the years ahead.

Presentation Highlights:

• The World needs more gas for longer – LNG markets are growing
• The East Coast has strong pricing, a growing supply gap – and LNG ullage
• The Taroom Trough is exceptionally well located on multiple fronts
• Growing need for energy security and key role for gas in the medium term
• The Taroom Trough is currently hosting a multiple operator appraisal program
• Early success with stablished flow rate – more to follow within only the next 2 months

Release Highlights:

• Elixir Energy Limited is pleased to announce its highly successful initial flow test in its 100% owned Grandis project in the Lorelle Sandstone of Queensland.
• Maximum rate of 2.3 million standard cubic feet per day (MMSCFPD) and stabilized flow rate of 1.3 MMSCFPD (through a 20/64 choke) achieved without stimulation, multiple zone flow testing to follow imminently.
• Elixir understands this is the deepest unstimulated flow of gas in onshore Australia East of the Perth Basin.

Arrowhead is initiating coverage on Elixir Energy (Elixir, EXR, or the company) with a fair value bracket of AUD 0.27 to AUD 0.35 per share (share price on March 21, 2024: AUD 0.073) derived using a Relative Valuation methodology.

• Elixir Energy is a gas exploration and development company based in Australia. It is focused on the exploration and appraisal of natural gas, particularly coal-based methane (CBM), known as coal seam gas (CSG), in Australia. The company is currently engaged in three projects: the Grandis Gas Project, the Nomgon IX CBM Production Sharing Contract (Nomgon Project) and the Gobi H2 Project. 
• Elixir’s flagship project is the Grandis Gas Project with a 100% interest in the petroleum exploration permit ATP 2044 in Queensland. It spans 1,000 square km near the Wallumbilla gas hub and holds a current contingent resource (2C) of 395 billion standard cubic feet (bcf) of gas. The company drilled the Daydream-2 appraisal well in late 2023 and will stimulate and flow-test it in H1 2024, aiming to significantly expand the existing contingent resource base.
• The company successfully drilled an appraisal well, Daydream-2, in Queensland in Q2 2024. Recent laboratory analysis of cutting samples revealed the presence of clay coatings encircling quartz grains for the first time in Queensland at depths below 4,200 metres (m).
• EXR acquired coal desorption samples from drill cuttings while drilling unconventional targets at Daydream-2 well, increasing prospective resources in ATP 2044 to 3.6 trillion cubic feet (tcf) (2U). These resources will be key targets in the upcoming stimulation and testing program that will commence in mid-April 2024 and is expected to be completed by Q2 2024. Diagnostic Fracture Integrity Tests (DFITs) will commence in March 2024.
• In November 2023, Elixir entered an information-sharing agreement with Origin Energy Limited (Origin) for the Daydream-2 well. This collaboration is a mutually beneficial partnership, leveraging drilling expertise to secure financial backing for exploration activities.
  • Under the agreement, Origin has paid AUD 1 mn in non-dilutive funding in H1 2024, supporting EXR’s exploration efforts.
  • The agreement involves Elixir acquiring crucial data for Origin’s greenhouse gas license, aligned with Origin’s carbon capture and storage (CCS) initiatives.
  • Additionally, Origin covered incremental costs incurred to gather the information apart from the AUD 1 mn.
• EXR’s second project is the Mongolian Gas Project—Nomgon Project, the company’s most advanced asset. The project is in the South Gobi region of Mongolia, and the risked recoverable resource in the expansive license area is estimated at 14.6 tcf in a best-case scenario. The project possesses exceptional infrastructure advantages, with access to power lines, well-maintained roads, a rail network, a local workforce and support from the service sector.
• The company’s third project is the Gobi H2 Project, a green hydrogen project located in the Gobi region of Mongolia. The project has been jointly advanced by Elixir and the Japanese firm Terras Energy (an 85% owned subsidiary of Toyota Tsusho Corp). In FY 2023, a global consulting firm, AECOM, completed a pre-feasibility study on the project, showing the potential of the Gobi region in the combined capacity factor of the available solar and wind resources when compared to other similar regions in the world.
• In December, Elixir raised AUD 6.5 mn (before costs) through the issue of new shares and placement to institutional and sophisticated investors for multiple-stage stimulation and flow testing at Daydream-2 well. 
• Additionally, the company received AUD 415k in tax credits from the Federal Government for the research and development of the Daydream-2 well in 2023. It has further tax credits worth AUD 4.9mn available from the government for the same purpose, which will cover up to 48.5% of the total costs of the well exploration.
• The company is listed on the Australian Securities Exchange (ASX) under the ticker EXR.

Release Highlights:

• Coiled tubing unit cleaning out Daydream-2 wellbore in preparation for DFITs
• Significant stimulation and testing program at Grandis on track for April through to June
• Nomgon Pilot Project continues reservoir de-pressurisation process

This is a short executive summary on Australia-based and ASX-listed oil and gas exploration and production company Elixir Energy Limited from CEO and MD Neil Young.