Why is Elixir Energy in a Trading Halt?
Elixir Energy Limited
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Why is Elixir Energy in a Trading Halt?

Elixir Energy Limited (ASX: EXR), an Australian Securities Exchange (ASX) listed gas exploration and development company, has taken the market by surprise by requesting a trading halt effective from the start of trading on December 11, 2023. The company is known for its extensive gas exploration projects, with a strong presence in Mongolia and Queensland, and a recent foray into renewable energy ventures.

Elixir's Diverse Portfolio

Elixir Energy Limited has gained prominence in the energy sector through its diverse portfolio of projects, which includes Mongolian Gas, Mongolian Hydrogen and Green Energy, and Queensland Gas.

Mongolian Gas

Elixir Energy's most mature asset is its 100% owned Nomgon IX Coal Bed Methane (CBM) Production Sharing Contract (PSC) project located in the South Gobi region of Mongolia. This venture has gained attention as it represents the first such CBM test conducted in Mongolia.

Mongolian Hydrogen and Green Energy

In February 2021, the company established a wholly-owned subsidiary, GOH Clean Energy LLC, to pursue renewable energy ventures, particularly in the hydrogen and solar sectors. Early this year, Elixir Energy announced a significant development when it signed a term sheet with SB Energy, signaling progress in its green hydrogen venture.

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Queensland Gas

Elixir Energy expanded its portfolio in August 2022 by acquiring a 100% interest in petroleum exploration permit ATP 2044 in Queensland. This acquisition was achieved through the purchase of the special-purpose vehicle EnergyCapture Pty Ltd, which was subsequently renamed the Grandis Gas Project. Notably, the Grandis Gas Project reported an initial contingent resource (2C) of 365 billion standard cubic feet of gas in late November 2022, further solidifying the company's foothold in the gas exploration market.

Financial Snapshot

As of December 31, 2022, Elixir Energy's capital structure reflects the following key figures:

Number of Shares: 912 million
Performance Shares & Options: 35 million
Market Capitalization: $137 million
Cash Holdings: $14 million
Enterprise Value: $123 million

The Trading Halt Request

In a letter addressed to ASX Operations Pty Ltd, Elixir Energy Limited officially requested a trading halt pursuant to Listing Rule 17. 1, starting from December 11, 2023. The company cited the reason for the trading halt as being "pending an announcement by the Company with respect to a capital raising. "

Elixir Energy Limited's request further specified that the trading halt should be lifted on the earlier of:

The release of an announcement to the market.
The commencement of normal trading on Wednesday, December 13, 2023.

The company emphasized that it is not aware of any reason why the trading halt should not be granted, leaving market participants eagerly awaiting further details regarding the impending capital raising initiative.

Market Speculation

The trading halt request has ignited speculation within the financial community, with analysts and investors eagerly anticipating the details of Elixir Energy's capital raising endeavor. Given the company's recent accomplishments, including the successful pilot program in Mongolia and the substantial gas resource discovered in Queensland, market observers are keen to ascertain the scope and objectives of this anticipated capital raise.
Conclusion

Elixir Energy Limited's decision to request a trading halt has piqued the interest of investors and industry experts alike. With a diverse portfolio of projects spanning across gas exploration and renewable energy, the company's forthcoming capital raising announcement is expected to provide valuable insights into its strategic vision and growth prospects. As we await further information, the financial world watches with bated breath, ready to evaluate the implications of this significant development on Elixir Energy's future trajectory.

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