Elixir Energy Ltd Gas Project Partnership Advances Commercialisation Strategy

Elixir Energy Advances Gas-to-Market Strategy with APA Group Partnership

Elixir Energy Limited (ASX: EXR) has taken a significant step towards commercialising its Taroom Trough gas resources by partnering with major pipeline operator APA Group. The collaboration aims to determine the optimal pathway for connecting its northern Taroom Trough gas to Australia's premier gas trading hub. The Early Works Agreement (EWA) represents a critical milestone in the Elixir Energy Ltd gas project partnership strategy.

This development marks progress in Elixir's journey towards potentially booking maiden reserves and establishing commercial gas production. The company currently holds 2.8 TCF of independently certified 2C Contingent Gas Resources.

The feasibility study will evaluate the most cost-effective route for transporting gas from Elixir's 40 TJ/d notional Lorelle pilot project. The destination is the Wallumbilla Gas Hub (WGH), Queensland's central gas exchange connecting nine major pipelines. Results are expected within 12 weeks and will include crucial Class-V capital estimates.

Strategic Infrastructure Planning Sets Foundation for Commercial Development

The Elixir Energy Ltd gas project partnership with APA Group addresses one of the most critical aspects of gas project development. The collaboration establishes a clear and economical path to market for Elixir's substantial gas resources.

The study will compare two potential pipeline routes from the Lorelle-3H location in ATP2056. Furthermore, this analysis will inform crucial investment decisions moving forward.

Route Comparison Analysis

The feasibility work encompasses two primary options for gas transportation:

• Option 1: 25km pipeline north to Roma to Brisbane Pipeline (RBP)
• Option 2: 50km pipeline northwest directly to Wallumbilla Gas Hub

The feasibility work extends beyond route selection to encompass comprehensive commercial preparation. This includes capital expenditure estimates, operational costs, regulatory approval requirements, and time-to-serviceability assessments. This systematic approach ensures Elixir can make informed decisions about the most efficient pathway for its gas resources.

"The agreement supports final concept selection for the pathway of gas produced from a notional Lorelle pilot project to reach the WGH and the feasibility works required to prepare an entry into pre-FEED."

What Makes Basin Centred Gas Plays Attractive?

Basin Centred Gas (BCG) plays represent unconventional gas resources trapped within tight rock formations across large geographical areas. Unlike conventional gas fields where hydrocarbons are concentrated in specific structural traps, BCG resources are distributed throughout the basin. In addition, these plays typically require horizontal drilling and hydraulic fracturing to achieve commercial flow rates.

The Taroom Trough's BCG play offers several distinct advantages:

• Massive scale: Multi-TCF resource potential across extensive acreage
• Consistent geology: Predictable reservoir characteristics enable systematic development
• Strategic location: Immediate proximity to existing infrastructure reduces development costs
• Associated liquids: Valuable condensate and light oil production alongside gas

For investors, BCG plays represent longer-term, more capital-intensive developments. However, they offer the potential for sustained production over decades once established. The key to success lies in demonstrating commercial flow rates through testing programmes like Elixir's upcoming Lorelle-3H flow test.

Lorelle-3H: A Watershed Moment for Development

The Lorelle-3H appraisal well represents a pivotal test case for the northern Taroom Trough's commercial viability. The two-phase drilling programme has already delivered encouraging results that support the Elixir Energy Ltd gas project partnership strategy.

Phase 1 Achievements

The initial drilling phase exceeded expectations across multiple key metrics:

• Pilot hole drilled to 3,580m total vertical depth
• Comprehensive core and logging programme across Permian sandstone reservoirs
• Petrophysical results exceeded expectations
• Multiple thick gas and gas-condensate charged reservoirs identified

Phase 2 Completion

The second phase focused on horizontal well construction and completion activities:

• 1,157m horizontal sidetrack into primary Tinowon 'Dunk' Sandstone target
• Well cased and suspended for stimulation and testing
• Production testing scheduled to commence June 2026

The horizontal well design specifically targets the demonstration of commercial flow rates from the Basin Centred Gas Play. Moreover, results could potentially lead to Elixir's maiden Reserve conversion, marking a transformational milestone for the company.

Strategic Positioning in Australia's Gas Market

Elixir's location within the Taroom Trough provides exceptional strategic advantages in Australia's evolving gas market. As the largest acreage holder in the region, Elixir controls significant resources in one of Australia's most infrastructure-rich gas provinces.

Infrastructure Advantages

The project's location offers unparalleled access to existing infrastructure:

• Direct proximity to Wallumbilla Gas Hub
• Access to multiple existing gas pipelines
• Connection to 25 mtpa LNG export infrastructure
• Proximity to operating refineries for condensate sales
• Established onshore gas industry support services

The company's acreage position borders Shell's primary area of investment within the Taroom Trough. This provides validation of the geological prospectivity and potential for future collaboration or infrastructure sharing arrangements.

Competitive Positioning

Elixir maintains several competitive advantages that strengthen the Elixir Energy Ltd gas project partnership approach:

• 2.8 TCF independently certified 2C Contingent Gas Resources
• Largest acreage position in Taroom Trough
• Strategic location adjacent to Shell operations
• Multi-commodity potential including gas and condensate/light oil

Value-Added Liquids Production Opportunity

Beyond gas production, the announcement indicates Elixir expects to produce significant quantities of associated condensate and light oil. This represents an additional revenue stream that could materially enhance project economics, particularly given Queensland's established refining market.

The company plans to conduct separate optimisation studies for liquid hydrocarbon sales and transport. This recognises the distinct market dynamics and infrastructure requirements for these products.

Furthermore, condensate and light oil typically command premium pricing compared to gas on an energy-equivalent basis. This associated production could provide important cash flow support during the early phases of development.

What Are the Upcoming Catalysts?

Elixir has established a clear timeline of value-driving milestones over the coming months that will support the Elixir Energy Ltd gas project partnership objectives.

Immediate Catalysts (Next 12 Weeks)

The near-term focus centres on infrastructure planning and preparation:

1. APA Group feasibility study completion with Class-V capital estimates
2. Final concept selection for gas transportation pathway
3. Pre-FEED preparation and entry planning

Medium-Term Catalysts (June 2026)

The production testing phase will provide critical data for commercial decisions:

1. Lorelle-3H multi-stage fracture stimulation
2. Production testing commencement
3. Commercial flow rate demonstration
4. Potential maiden Reserve conversion evaluation

Strategic Benefits

The systematic approach delivers multiple strategic advantages:

• Early route definition enables timely condensate/light oil monetisation
• Infrastructure clarity supports future expansion planning
• Reserve conversion potential transforms investment thesis
• R&D Tax Incentive provides up to 48.5% cost refund on qualifying activities

Why Should Investors Monitor Elixir Energy?

Elixir Energy represents a compelling opportunity in Australia's unconventional gas sector. The company offers exposure to multi-TCF resources in one of the country's most strategically advantaged locations.

The systematic approach to development demonstrates the methodical execution required for successful BCG play development. This extends from resource definition through infrastructure planning to commercial testing.

Key Investment Differentiators

Several factors distinguish Elixir from other gas development opportunities:

• Scale: 2.8 TCF certified contingent resources provide long-term production potential
• Location: Unparalleled infrastructure access reduces development costs and risks
• Timing: Entering commercial testing phase as Australian gas markets tighten
• Diversification: Multi-commodity exposure through associated liquids production
• Partnership: APA Group collaboration validates commercial pathway development

The announcement marks a significant advancement in the Elixir Energy Ltd gas project partnership strategy. This positions the company for potential transformation from explorer to commercial gas producer.

With the Lorelle-3H well representing the first horizontal well drilled outside of Shell acreage on the upper western flank, the results could validate Elixir's substantial acreage position.

"Elixir Energy has positioned itself as a major player in Australia's unconventional gas sector, with significant upside potential due to its strategic location, massive resource base, and systematic development approach."

The company approaches potential reserve conversion and commercial production with critical flow testing scheduled for June 2026. Infrastructure pathway studies are nearing completion, providing investors with clear catalysts to monitor.

As Australia's gas markets evolve and domestic supply security becomes increasingly important, Elixir's Taroom Trough resources could play a significant role. The Elixir Energy Ltd gas project partnership with APA Group represents more than infrastructure planning – it signals Elixir's transition from explorer to potential producer with clear pathways to market.

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