The good news keeps on coming for Elixir Energy Ltd (ASX:EXR, OTC:ELXPF), as the company successfully flows gas to surface from the deep coals at its Daydream-2 well at its 100% owned Project Grandis.
This marks the first ever flow of gas from the deep coals in the Taroom Trough, which is part of the larger Bowen Basin in Queensland.
Elixir’s Daydream-2 well has flowed gas to surface from the uppermost stimulated zone in the well — a package of coal seams between 3,786 metres and 3,678 metres deep. The flow was unassisted and through a full well-bore of water.
This is the first flow of gas from the deep coals in the Taroom Trough and achieving this was one of the key objectives of Daydream-2. This is the deepest coal to have flowed gas to surface in Australia.
A “fantastic” outcome
“This is a fantastic outcome for Elixir and the overall Taroom Trough. It has long been recognised that the deep coals here contain many trillions of cubic feet of gas in place – and now we have demonstrated that some part of that can be flowed to surface,” said Elixir managing director Neil Young..
“We consider this is just the start of an incredible journey of bringing on the very large new sources of gas that Australia vitally needs.”
Working towards a contingent resource booking
Having achieved a flow from the coals — the key outcome that Elixir sought from this stage of the program — the company has now now moved onto its next phase.
Elixir previously set out its internal estimate of the prospective resources contained in the Permian coals in ATP 2044. The 2U (mid case) prospective resource was 3,603 billion cubic feet.
Flowing gas to surface was the key trigger to commence converting the project’s prospective resources into contingent resources. Elixir will now work with its independent resource certifiers to obtain an initial contingent resource certification from the deep coals.
The process of conversion of all of the prospective resources will require more data from new wells which achieve a similar coal flow outcome in the broader Taroom Trough.
The next phase of the Daydream-2 program will see Elixir milling out all the plugs that separate the six separate stimulated zones in the Permian section of the well. A flow test will then be conducted from all the zones together.
The company says the timing of any announcements to the market on this flow test will depend on factors such as the period of the flow-back of stimulation fluid, multi-fluid slugging behaviours, etc, and will likely take some weeks.
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