Elixir Energy's Daydream-2 Well Shows Unexpected High Pressure, Indicating Potential Gas Reserves
EXR (EXR) Share Update July 2024 Wednesday 31st
Elixir Energy Reports Unexpected High Pressure at Daydream-2 Well
Elixir Energy Limited (ASX: EXR) has announced an unexpected high pressure measurement at the Daydream-2 wellhead in its Grandis Project, located in Queensland's Taroom Trough. This development could indicate significant gas reserves in the area.
Instant Summary:
- On-site operations at Daydream-2 have recommenced.
- High pressure of 3,410 psi noted at the wellhead.
- Potential gas contributions from Lorelle sandstone and other zones.
- Elixir Energy to flow test and stimulate additional zones.
Daydream-2 Well Update
Elixir Energy Limited has resumed on-site operations for the Daydream-2 stimulation and testing program at its 100%-owned Grandis Project in Queensland's Taroom Trough. The company's contracting staff have returned to the well-site to prepare for the arrival of the coil tubing unit (CTU), imported from New Zealand.
During these preparations, the pressure at the Daydream-2 wellhead was measured at 3,410 psi, despite the presence of a full column of saline water in the hole. This high pressure, although safely contained behind two separate barriers, was unexpected and has raised questions about its source.
Possible Causes of High Pressure
Elixir Energy has identified two potential causes for the anomalously high wellhead pressure. First, the temporary plug separating the high-pressure Lorelle sandstone from the rest of the wellbore may be leaking. Second, perforations placed above the Lorelle sandstone, in what were previously assessed as low-quality siltstones, might now be contributing high-pressure gas.
The upcoming program aims to clarify this issue as Elixir Energy moves to flow test the Lorelle sandstone and stimulate other zones higher in the well. This could provide valuable insights into the gas potential of the Taroom Trough.
Management's Perspective
Elixir Energy's Managing Director, Neil Young, expressed optimism about the unexpected high pressure at the Daydream-2 wellhead. He stated, 'The unexpected high pressure at the Daydream-2 wellhead is yet another example of the great potential of the Taroom Trough to contribute gas from an enormously thick gross section containing multiple sedimentary forms. The next month or so will be an exciting time for Elixir as we continue to learn more and more from what has been an incredibly valuable appraisal well to date.'
The unexpected high pressure at the Daydream-2 wellhead suggests significant gas potential in the Taroom Trough, which could positively impact Elixir Energy's stock. Investors may view this development as a sign of future profitability and increased gas production capabilities. However, the exact impact will depend on the results of the upcoming flow tests and stimulation program.
Investor Reaction:
Analysts are likely to react positively to the news of high pressure at the Daydream-2 wellhead, as it indicates potential for significant gas reserves. However, they will also be cautious, awaiting the results of the flow tests and stimulation program to confirm the extent of these reserves.
Conclusion:
Investors should keep a close eye on the upcoming flow tests and stimulation program at the Daydream-2 well. The results could provide crucial information about the gas potential in the Taroom Trough and impact Elixir Energy's stock performance. Stay informed and consider the long-term implications of this development for your investment strategy.