Buoyed by ongoing success at Project Grandis in Queensland’s Taroom Trough, which is set to play a considerable role in feeding strong demand for gas on Australia’s east coast, Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) is seeking a retention lease for ATP 2044.
After concluding a highly successful testing and appraisal program at Daydream-2, the company has met all licence commitments for ATP 2044 with the retention lease application being a step toward commercial production.
In Queensland, the retention lease is called a Potential Commercial Area (PCA) which has a maximum term of 15 years.
Next well
Success at Daydream-2 at which gas flowed from five out of six stimulated zones has also seen the company move to plan the next appraisal well as Project Grandis – Daydream-3.
This well will enable Elixir to focus on further de-risking of the very significant gas resources now established at Project Grandis.
“Exceeded expectations”
Elixir’s managing director Neil Young said: “The Daydream-2 appraisal program has massively exceeded our expectations of more than two years ago when we acquired Project Grandis.
"Our work – combined with that of our various neighbours – is opening up vitally needed and very material gas resources for Gladstone, Queensland and Australia.
"The extensive data gathered to date will inform possible pathways to production.
"We expect our discussions with potential partners will now likely be accelerated as the global oil and gas industry turns its eye to the enormous opportunities in the Taroom Trough.”
Gas flow rates
Daydream-2 well is being retained through a process of suspension as a future gas producer and the Coil Tubing Unit (CTU) has been released back to Elixir’s neighbouring operator to continue with its ongoing multi-well program.
The well delivered gas flow rates from five out of the six stimulated zones – including for the first time in two separate deep coal zones.
Achieving flows from these deep coals should allow the commencement of the conversion to contingent resources of the current prospective resources booked in the coals in ATP 204.
Elixir will work with its independent auditors over this initial contingent resource booking in the coming months.
During the final phase of testing, gas flowed at various rates and various choke sizes. A maximum flow rate of 2.6 MMSCFD was recorded and the stabilized rate was 1.0 MMCFPD prior to shut-in.
This reduction in stabilised rate has been attributed to condensate or water banking immediately around the wellbore likely caused by the multiple open and closures of the well during recent operations or by adverse reactions to fluids introduced into the wellbore.
Such issues are common in early-stage tight gas plays globally and can be remedied by operational changes to fluid use and well management.
Daydream-2 successes
Due to the appraisal nature of this well, the extensive multi-phase testing and evaluation undertaken, including for R&D purposes, was required as part of the planning for a future development.
Elixir said that the successes of the Daydream-2 appraisal program were multiple and material:
- Achieving what Elixir considers to be a commercial flow rate.
- Increasing 2C contingent resources by 328% to 1.47 trillion cubic feet.
- Increasing 2U prospective resources by 180% to 3.6 trillion cubic feet.
- Flowing gas from two separate deep coal zones, hence allowing the commencement of the conversion of these prospective into contingent resources.
- Flowing gas from five out of six stimulated zones – some for the first time in the Taroom Trough.
- Confirming the raw gas contains low amounts of CO2 – within pipeline specification.
- Meeting all licence commitments thus facilitating the PCA process, which provides tenure for up to 15 years, in line with all HSE and community standards.
- Applying novel extraction techniques, some for the first time in Australia, attracting Commonwealth Government research and development fiscal support.