Elixir Energy Ltd (ASX:EXR) has reached total depth of 4,300 metres at its Daydream-2 appraisal well at the Grandis Gas Project (ATP 2044) in the Taroom Trough of the Bowen Basin, Queensland. In the process, the company discovered an unexpected naturally permeable gas bearing zone, with gas flowing to surface without stimulation.
The announcement sent the company's shares up by as much as 33% this morning after it emerged from a trading halt.
“Flowing gas without stimulation from a deep section is immensely exciting for Elixir. Although these are still early days, the unexpected intersection of a permeable gas zone this deep in the section may unlock another new Australian deep gas play and will be of interest to many parties.
"Furthermore, on almost every other front the well has exceeded expectations – in terms of geology, engineering, economics and project management,” said Elixir managing director Neil Young.
In total, the company intersected a gross interval of 607 metres, consisting of sandstones, coals and siltstones. Peak gas shows of up to 800 units were noted, consistent with nearby wells.
Deeper than planned
The well’s total depth of 4,300 metres was around 100 metres deeper than had been planned, yet drilling was extended as the well continued to demonstrate elevated levels of gas in excess of pre-drill estimates. Elixir says that the deeper total depth also allows for greater operational flexibility in relation to the next few phases of the company’s appraisal plans for the well.
When drilling the final 100 metres of the well, a rapid increase in the rate of well penetration (drill break) was encountered. This drilling break was associated with a gas influx from the formation into the well bore. This gas influx was circulated out of the well to the rig’s flare.
Elixir says that encountering a permeable reservoir section this deep in the well presents significant upside for the Grandis Gas Project. While further work is required to truly establish the implications of this discovery, it could be “materially positive”.
What’s next for Daydream-2?
The drilling of the Daydream-2 well reached a greater total depth than planned, in less time and at a cost lower than budgeted.
The company will now acquire wireline logs and undertake a petrophysical evaluation. The well will be then cased and suspended. Once all the data has been compiled, Elixir will finalise its forward plan for extensive evaluation, completion and production testing of this well.