Shell discovered gas in QLD’s Taroom Trough years ago. Elixir Energy starts drilling it in 2023

Mon 29 Aug 22, 10:46am (AEST)
A road stretching to the horizon in the Australian outback beneath a blue sky
Source: Unsplash

Key Points

  • Elixir Energy has purchased a 100% interest in an exploration permit in the QLD Bowen Basin owned by EnergyCapture
  • Elixir will commence drilling in 2023 with an unrisked best estimate resource of some 2.4 trillion cubic feet of gas
  • Shell and Santos operate nearby permits; acreage is located nearby Wallumbilla Hub east coast gas pipeline connector zone

While Elixir Energy (ASX:EXR) continues to develop its Mongolian-based Nomgon coal bed methane project, the company will next year kick off operations a lot closer to home.

How close? Onshore Queensland close. Elixir has bought a 100% interest in EnergyCapture’s ATP2044 exploration and development permit, which allows activity on acreage estimated by Shell to contain up to 2.4 trillion cubic feet of gas (tcf). 

High-impact drilling, Elixir notes, will launch in 2023. The company had over $20m in cash at the end of June, and expects it does not need to shake a tin to get a move on. 

Located in the Taroom Trough, part of the larger QLD Bowen Basin, the acreage is located relatively nearby the Wallumbilla Hub natural gas terminal (35km), a storage and distribution hub for natural gas in North Queensland. 

Pipelines from Walumbilla descend south all the way to Melbourne and beyond, while another major pipeline from Walumbilla to an LNG facility in Gladstone allows users to sell gas on international spot markets.

Fast-track to new source of gas

Company management has its eye focused firmly on the acreage’s proximity to Walumbilla, with that geographical advantage offering significant potential opportunity.

“Our team has considerable experience in Queensland, which in my view is one of the few locations in the world which could credibly supply new sources of LNG to a very short international market in the next few years,” Elixir Energy MD Neil Young said. 

“The East Coast gas market is also facing material gas shortages as identified by the ACCC and our new asset has great optionality in supplying either or both markets.” 

“The project sits adjacent to permits operated by both Shell and Santos and we will explore potential synergies to target this exciting play.” 

What is Elixir paying, and who is EnergyCapture? 

Investors ought to note EnergyCapture will retain a 3% overriding royalty on hydrocarbon production at the project, though, only covering condensate liquids.

Elixir has also given EnergyCapture roughly $3m worth of its shares and an upfront payment of $0.5m. 

EnergyCapture is registered in Kew, Victoria. The company’s management team is mostly former staffers from FAR Limited (ASX:FAR), a company with oil and gas operations in West Africa. 

EnergyCapture’s Ownership runs as follows: 

  • Managing Director: Ben Clube (formerly BHP, Far Limited)

  • Technical Director: David Ormerod (formerly BHP) 

  • Chief Technology: Rohan Irvin (formerly with Woodside, Far Limited) 

  • Operations: Lee Reborse (formerly Far Limited) 

  • Exploration: Peter Nicholls (formerly BHP; Far Limited) 

In the background: Elixir is set to deliver results of August drilling activities at Nomgon in the coming weeks. 

Elixir's six month charts show the company was able to quickly shake off losses between June and July
Elixir's six month charts show the company was able to quickly shake off losses between June and July
Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Elixir Energy was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.


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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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