Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) is highly encouraged by very positive log results returned for the recently discovered deep permeable zone in the Daydream-2 appraisal well at the Grandis Gas Project and is moving to an unprecedented stimulation and testing phase.
The company said the discovery of the presence of porous and permeable sandstone reservoirs at 4,200 metres in Daydream-2, which produced gas to surface, had great significance for the Grandis Project and for the greater Taroom Trough in Queensland’s Bowen Basin.
Better reservoir properties
During the drilling in December 2023, the well intersected a sandstone interval with significantly better than prognosed reservoir properties.
Porosity of greater than 10% was logged, which is generally unusual for this depth onshore, other than in certain locations such as the Permian section of the Perth Basin.
The petrophysical log analysis and the recovery of gas indicates there are three sandstone reservoirs in this section that are gas-saturated. The gross thickness of these sands extends over ~12 metres.
Daydream-2 Petrophysical Logs over the Lower Lorelle Sandstone.
Novel stimulation testing
Elixir believes the extent of this play at Grandis could be significant and is, therefore, taking unprecedented steps to further assess the findings.
These sands will be included in the company’s extensive and novel stimulation testing regime, incorporating a diagnostic fracture injection test (DFIT), which will begin around the end of this month with the rigging up of a coiled tubing unit on location.
DFITs involve the injection of small volumes of fluid into carefully selected zones and are used to measure and calibrate the in-situ earth stress, formation permeability and pore pressure. These are key parameters for stimulation design and reservoir engineering in low-permeability formations.
Comprehensive DFIT program
Elixir will undertake DFITs into five separate zones to gather these data – including the recently identified permeable zone.
The DFIT process will take around 4-8 weeks and the main stimulation program will follow after that.
Elixir’s managing director Neil Young said: “The next stage of Elixir’s Daydream-2 well program is now imminent, with the expected arrival on site of equipment for the initial stimulation and testing phase in around a fortnight.
“Our technical team’s analysis to date indicates a potential new play that could be extensive. Our next stages of work are following to test that, starting with the imminent, comprehensive DFIT program.”
Not common in Australia
Such a comprehensive and detailed DFIT program has traditionally not been commonplace in Australia.
However, Elixir has identified material benefits to conducting this extensive program as it underwrites the Research and Development aspect of the program and should facilitate an optimal stimulation design to unlock the discovered gas resources.
The key long lead items for the stimulation program – principally various sized proppants – have recently been ordered from manufacturers in China.
Daydream-2 was drilled to a total depth of 4,300 metres, which Elixir understands to be the deepest well in Queensland in over a decade.
Gas saturated reservoirs
The petrophysical log analysis and the recovery of gas indicates that there are three gas-saturated.sandstone reservoirs in this section.
The log character of the zone reveals significant information about the sands, namely:
Map of ATP-2044 and the Daydream-2 and Dunk-1 locations.
Stratigraphic correlations show a similarity with the Lower Lorelle Sandstone identified in the well reports from the Dunk-1 well drilled by BG Group around a decade ago in PCA 305 (Shell (LON:RDSa) – 100%) some 26 kilometres away.
Although the ultimate extent of these sandstone reservoirs is unknown, there are clear indications that a quality reservoir is present – potentially over an extensive area, given the correlations with Dunk-1. Identifying the extent and thickness of these sandstones is a firm part of Elixir’s plans going forward.
The timeline for the work program going forward.