HIGHLIGHTS
• Daydream-2 well successfully stimulated and flow tested
• Gas flowed from multiple stimulated zones, including deep coals for the first time
• ATP 2077 formally awarded and 173 Bcf additional contingent resources booked
• Elixir’s fiscal position remains strong - $10M at quarter end
MANGAGING DIRECTOR’S REPORT TO SHAREHOLDERS FOR THE QUARTER
The Daydream-2 appraisal well was again the key focus for Elixir during the quarter. The considerable
successes of this program (albeit with some ebbs and flows typical of an early stage appraisal program)
has provided the Company with a very strong platform to continue to de-risk the Grandis Project.
North America’s considerable experience in large unconventional plays over the last two decades
indicates that having multiple operators try different approaches to “cracking the code” to most
effectively liberate gas presents by far the optimal approach to really open up such plays.
In this context Elixir is very pleased to be currently accompanied by other active explorers in
Queensland’s Taroom Trough. Collectively, considerable sums are being invested, contingent
resources booked, knowledge transferred and service sector capabilities continuously improved.
During the last quarter Elixir’s contributions to these collective efforts were material and multiple. These
included flowing gas from five out of six stimulated zones, including from deep coals for the first time
in this region.
Elixir expects the various current – and likely new – Taroom Operators to expand their efforts in the
years to come - to ultimately deliver a lot of gas into the nearby infrastructure that can readily take it to
desperately short domestic and international markets.
In the current early stage of such a large play, the teething issues that typically arise include rationing
of the required equipment, service sector companies requiring different approaches, etc. Elixir has
experienced some of these – but we are convinced that we can see these already being ironed out.
For instance, the collective efforts in the region are already leading to interest from the likes of new
service sector and infrastructure companies, with highly relevant international expertise and
equipment.
During the quarter Elixir was formally granted ATP 2077 – which immediately added 175 Bcf of new
contingent resources. The timeline from being notified as preferred tenderer to formal award was very
rapid – reflecting the strong Queensland regulatory environment generally and the well established oil
and gas presence in the immediate region specifically.
Post the end of the quarter, Elixir was pleased to execute a Memorandum of Understanding with
Australian Gas Infrastructure Group (AGIG) to provide a framework under which to better investigate
the development of the required infrastructure to take Taroom sourced gas to the nearby market
interfaces. Elixir sees this is also an area of potential fruitful cooperation.
That cooperation could extend to working with the likes of Government regulators. Post the end of the
quarter Elixir notes the election of a new Government in Queensland which is expected to be supportive
of the ongoing development of the State’s large gas industry.
Elections have also taken place in Mongolia in recent months – at both the National and Local
Government levels. New Government officials are settling in and a key focus is adding new and cleaner
energy sources for a system that is currently suffering supply shortfalls and is dominated by coal. In
this context Elixir’s Nomgon pilot project, which continues to de-pressure coal seams through water
production on a steady basis, can be part of supporting this increasingly strong political agenda.
Given the fiscal support provided towards the costs of the Daydream-2 program through the
Commonwealth Government’s research and development scheme, the financial position of Elixir
remains strong, with a net position of $10 million recorded at quarter end.
AUSTRALIAN GAS – GRANDIS GAS PROJECT (ATPs 2044 and 2077)
Elixir has a 100% interest in petroleum exploration licences ATP 2044 and ATP 2077 located in
Queensland (the Grandis Gas Project). These tenements are located proximate to the Wallumbilla
gas hub and can access domestic and international gas markets.
During the quarter ATP 2077 was awarded following the closing out of the relevant environmental and
native title processes required for the licence to be formally granted.
During the quarter:
• The Daydream-2 appraisal well was stimulated and flow tested.
• The Lorelle Sandstone flowed at a post stimulated stabilized rates of between 2.1 and 2.5
MMSCFD.
• Gas was flowed from two separate deep coal seams for the first time in the Taroom Trough.
• Post the end of the quarter the current appraisal program for Daydream-2 was concluded.
• An increase in contingent resources was booked following the formal award of ATP 2077.
All work was undertaken safely, in accordance with local community expectations and without
environmental or other negative incidents.
MONGOLIAN GAS – NOMGON CBM PSC PROJECT
Elixir Energy Limited (“Elixir”) has a 100% interest in the Nomgon IX Coal Bed Methane (CBM) Profit
Sharing Contract (PSC), located in proximity to the Chinese border in Mongolia’s South Gobi region.
The 30,000 square kilometre PSC was executed with the Mongolian Government in September 2018
and formally commenced in 2019.
The PSC has a minimum ten year exploration period and a thirty year (extendable) production period.
Elixir is substantially ahead of its exploration expenditure commitments under the PSC, even
notwithstanding the force majeure event caused by COVID-19 in recent years.
During the quarter the main focus area was on ongoing production testing at the Nomgon Pilot Project.
The Pilot continues to successfully de-water the coals and reduce reservoir pressure, with a view to
initiating sustained production from desorption by around the end of the year.
All work was undertaken safely, in accordance with local community expectations and without
environmental or other negative incidents.
MONGOLIAN RENEWABLES
The renewable asset base built up by Elixir to previously support the Gobi H2 green hydrogen project
in Southern Mongolia is now being reviewed for its potential contribution to growing local mining and
grid customers for cleaner energy.
ENVIRONMENT, SOCIAL & GOVERNANCE (ESG)
Elixir considers stakeholder engagement – particularly with local people in the areas of operations, to
be critical for all of its projects.
In Queensland, the Company’s recent operations provided the local economic boost that comes from
oil and gas operations – including utilizing multiple local accommodation venues, etc.
In Mongolia in the quarter, Elixir continues to support local communities in a number of ways such as
its multi-year program of tree-planting in the key local district in which it operates.
CORPORATE AND FINANCIAL
Capital raising
In July a placement was undertaken, raising $6.25 million at a price of 10 cents per share (with a one
for four matching EXROB listed option issued to the placees).
Changes in Issued Capital
During the quarter the Company issued 62,500,000 Shares, 15,625,005 Listed Options (free attaching
options) and 3,125,000 Listed Options (Broker options) under a Placement.
Also during the quarter, 3,400,000 Performance Rights expired and 331,933 listed options were
exercised and new ordinary shares of the same quantum issued.
Since the period end, 2,000,000 Performance Rights were issued, which was approved by
Shareholders at the 2024 Annual General meeting.
Financial
Elixir’s cash reserves as at 30 September 2024 were $5.9 million.
As at the end of the quarter, a receivable of $10.7 million in connection the Research & Development
tax credit due to be paid in connection with qualifying expenditure on Daydream-2 has been recorded
(unaudited). A loan of $6.6 million (including interest) is secured solely on the Research &
Development tax credit due.
As such, the net cash position as at the end of the quarter can be characterized as $10.0 million.
During the quarter, the Company spent $6.8 million on exploration activities, primarily on the
Daydream-2 well.
Board and Management
No changes to Board and Management occurred in the quarter.
Annual and other General Meetings
The Company’s 2024 Annual General Meeting was held during the quarter. All resolutions were
approved.
Appendix 5B Disclosures
The attached Appendix 5B includes an amount of $296,000 in item 6.1, which constitutes
compensation for the Managing Director and non-executive director fees paid during the quarter. In
addition, $72,000 was paid to Key Management Personnel for services provided. There were no other
related party transactions.
