Elixir (ASX:EXR) advance apace to Daydream drilling

Elixir Energy have continued its advance towards drilling the Daydream-2 well, with heritage now cleared, and construction of the well pad and road access upgrades well underway at its Grandis Gas Project near Queensland’s Wallumbilla gas hub.

Drilling an on-site water well to provide for the upcoming campaign and any future wells has also begun, and all key long lead items and tier 1 contracts have now been procured and awarded ahead of milestone drilling.

“The countdown to the drilling of the high impact Daydream-2 well continues apace and we are pleased to report strong progress on all fronts. As indicated by our recent execution of a Data Sharing Agreement with Santos, activity in the broader Taroom Trough is growing – reflecting its great market location and very large known gas resources,” Elixir Managing Director Neil Young said.

Growing Grandis gas

There is an initial contingent resource of 365 billion standard cubic feet of gas already in place at Grandis, and previous estimates of prospective resources are based only on gas in place estimates within the coal fracture system.

And if Daydream-2 flows gas from the deep coals, it is likely to offer a large material increase to the contingent resource.

Elixir also considers it feasible that additional gas in place could still exist adsorbed to the coal matrix, and the company will soon mobilise a desorption lab to undertake measurements from cuttings in the Permian coal measures, potentially contributing to an increase in volumes.

Leading up to spudding, Elixir will finish off construction and test its high pressure rated blowout preventer as it finalises the official rig release set for October.

Australian energy

With renewable energy sources lagging coal plant closures, Australia’s gas resources are squarely on the national agenda to bridge the gap and avoid the prospect of an overloaded system.

The Federal Government see the opposition’s nuclear push as uneconomic and far away, and Climate Change and Energy Minister Chris Bowen has ruled out Greens demands to ban new fossil fuel projects and declared a vital need for gas in the coming years.

Grandis sits in what has been an established as a highly productive oil and gas province for decades, and the Federal Government will pay for 43.5 per cent of the total costs of Daydream-2.

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