Is the Taroom Trough Poised to Become Australia’s Next Major Gas Hub?

Elixir Energy Limited ("Elixir") has announced a significant breakthrough in its Project Grandis located in Queensland's Taroom Trough. The company's Daydream-2 well has successfully flowed gas to the surface from a package of deep coal seams, marking the first time gas has been extracted from such depths in the region. This achievement represents a crucial step forward for Elixir as it progresses towards converting its vast prospective resources into contingent resources.

Gas Flow from Taroom Trough's Deep Coals: A Historic First

Elixir Energy Limited (ASX: EXR) has reported a groundbreaking development in its exploration efforts within the Taroom Trough. On August 23, 2024, the company announced that its Daydream-2 well had successfully flowed gas to the surface from the uppermost stimulated coal zone, located at depths between 3,786 and 3,678 meters. This marks the first instance of gas being extracted from such deep coals in the Taroom Trough, and indeed in all of Australia.

A Key Milestone in Project Grandis

The successful gas flow is a major achievement for Elixir's Project Grandis, which is wholly owned by the company.

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This result was one of the key objectives of the Daydream-2 program, and the unassisted flow of gas through a full well-bore of water represents a significant technical accomplishment. The company has now transitioned to the next phase of the program, which will involve further testing and data collection.

Pathway to Resource Certification

Elixir Energy's Managing Director, Neil Young, emphasized the importance of this development in the context of the company's broader resource strategy. "This is a fantastic outcome for Elixir and the overall Taroom Trough. It has long been recognized 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," Young stated.

This successful flow of gas is a critical step in converting Elixir's prospective resources into contingent resources. The company had previously estimated the 2U (mid-case) prospective resource in the Permian coals of ATP 2044 at 3,603 billion cubic feet. With the flow of gas now achieved, Elixir plans to work with its independent resource certifiers to secure an initial contingent resource certification from these deep coals.

Next Steps in the Daydream-2 Program

The Daydream-2 program is now moving into a new phase, which will involve milling out the plugs separating the six stimulated zones within the Permian section of the well. This will allow for a comprehensive flow test from all zones combined. The timeline for announcing the results of this flow test will depend on several factors, including the duration of the flow-back of stimulation fluid and the behavior of multi-fluid slugging.

A Promising Future for Australia's Gas Supply

Elixir Energy's breakthrough in the Taroom Trough is not just a milestone for the company, but also holds significant implications for Australia's energy sector. As the country continues to grapple with the need for new gas sources, the success at Daydream-2 suggests that the deep coals of the Taroom Trough could play a crucial role in meeting this demand.

"This is just the start of an incredible journey of bringing on the very large new sources of gas that Australia vitally needs," Young added, reflecting the optimism within the company regarding the potential of Project Grandis.

By securing a flow of gas from the deepest coals yet tested in Australia, Elixir Energy is positioning itself as a key player in the future of the nation's energy supply, with further developments from the Taroom Trough eagerly anticipated by industry observers and investors alike.

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