Elixir Energy (ASX:EXR) Farms Out Diona Sub-block to Xstate Resources
Farmout Agreement
Elixir Energy Limited has executed an agreement with Xstate Resources Ltd (ASX:XST), farming out the Diona sub-block of ATP 2077. Under the agreement, XST is assigned a 51% interest in the Diona sub-block in return for fully funding the cost of an exploration well, expected to be drilled in the third quarter of this year, subject to rig availability. Elixir retains a 100% interest in the Taroom Trough sub-blocks A & B of ATP 2077.
Exploration Plans
Elixir and XST have identified the location of the Diona-1 exploration well, targeting a conventional gas accumulation near the Wallumbilla Hub’s gas gathering line. Preparations for drilling are underway, with the well expected to be drilled in Q3.
Executive Comments
Managing Director Neil Young stated, “We are very pleased to have struck this mutually beneficial farmin deal with Xstate. Our respective technical teams have already identified a conventional gas target that we aim to drill in the months ahead. Given the location immediately adjacence to an under-utilised gas gathering system, success could rapidly be converted into positive cash-flows. Our acquisition of ATP 2077 last year was primarily driven by the additional acreage it gave us for the Taroom Trough focused Grandis Project. The work commitments for the licence will now be largely effectively met by this Xstate deal.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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