HIGHLIGHTS
• Land access agreement executed
• Contractor selection process well supported
• Daydream-2 appraisal well on track for drilling year end 2023
• Evolving Federal Government emissions policies support Grandis
Elixir Energy Limited (“Elixir” or the “Company”) is pleased to provide an update on its 100% owned
Grandis Gas Project located in Queensland’s Taroom Trough, which is proximate to the Wallumbilla
gas hub.
Elixir and a local landowner have executed the land access agreement for the Daydream-2 well (called
a Conduct and Compensation Agreement – a CCA – in Queensland). Well-site access has been
designed to minimize the environmental footprint and requires minimal civil works.
Elixir will shortly proceed to drill a water well at the location to both provide water for the drilling
operations and deliver the means to monitor local ground-water quality via an independent laboratory,
to ensure the drilling of the well and its completion do not cause any environmental issues. Post
Elixir’s oil and gas operations, the well will be provided to the landowner for agricultural purposes.
A process of canvassing of expressions of interest from drilling and ancillary service providers has
recently closed and interest has been strong. In parallel Elixir is negotiating with a drilling service
company and a significant local operator about various forms of cooperation such as sharing
mobilization costs.
The timing of the Daydream-2 well potentially hinges on the timing of the drilling activities of this other
local operator and the rig becoming available. At this stage Elixir still assesses that Daydream-2
should be ready to spud at around the end of 2023.
Earlier this week the Federal Government announced changes to the Safeguard Mechanism -
https://minister.dcceew.gov.au/bowen/media-releases/safeguard-mechanism-one-step-closerparliamentary-passage
This mechanism regulates the emissions from certain larger industrial ventures in Australia (including
gas developments). In this context Elixir notes:
1. The very low CO2 (around 1%) in the raw gas in the Taroom Trough (as evidenced from open
file data for producing assets in the region for which the Taroom Trough provided the source
rocks). Such levels of CO2 meet gas pipeline specifications - as such they are not removed
as part of the gas development - and hence are not scope 1 or 2 emissions of the gas supplier.
2. Grandis’ close proximity to existing transmission infrastructure allows for a lower emissions
profile than for more distant supply options.
3. The existing electrical infrastructure in the region will facilitate the electrification of future gas
developments, ranging from compressor stations to the drilling of wells. Backed by renewable
energy power purchase agreements (PPAs), that option (not available in more remote areas)
will facilitate a future gas development project with minimal scope 1 and 2 emissions.
4. The Government’s agencies such as the ACCC and AEMO have recently noted a rapidly
emerging shortfall between gas demand and supply on the East Coast. The new policy does
not change demand – but arguably does reduce supply options. Advantaged projects such as
Grandis are therefore placed in an even stronger competitive position.
Elixir’s Managing Director, Mr Neil Young, said: “Our Grandis Gas Project is proceeding well as we
progress towards the drilling of the Daydream-2 appraisal well by the end of this year. This is a very
high impact well where success will add material volumes of now even more competitive gas
resources to a gas market that Government bodies such as the ACCC and AEMO notes will very soon
be desperate for new gas supplies.”
