Elixir Energy Recovers 32% of Frac Fluid at 3 mmscfd Gas Rates at Lorelle-3H
Lorelle-3H recovers 32% of stimulation fluid with gas rates reaching 3 mmscfd
Elixir Energy has completed the initial clean-up phase at its Lorelle-3H appraisal well, recovering approximately 32% of stimulation fluid whilst observing dual-phase production rates of up to 1,700 bbls/d of fluid and gas rates reaching ~3 mmscfd. The recovery rate is high compared to offset data, indicating strong reservoir connectivity within the Tinowon ‘Dunk’ Sandstone.
The well has been producing both stimulation fluids and gas-condensate up the 4-1/2″ casing during this clean-up phase. Zero sand or proppant production has been observed, confirming the fracture stimulation network remains intact. Field measurements have identified low impurity gas with ≤1% CO2 and 0% H2S. Gas and condensate samples have been collected and sent for laboratory compositional analysis.
These early flow metrics provide the first real-world data on the Tinowon ‘Dunk’ Sandstone’s productivity potential in a horizontal configuration outside Shell’s acreage. Water rates were observed up to 1,700 bbls/d and gas rates up to 3 mmscfd when on a 24/64 choke with flowing wellhead pressures of ~750-1,500 psi, where fluctuations indicate the wellbore remains fluid-filled.
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What is flow-back testing and why does it matter?
Flow-back testing refers to the process of recovering stimulation fluids injected during fracturing to prepare the well for sustained gas production. High fluid recovery percentages indicate the fracture network has successfully connected with the reservoir rock, enabling hydrocarbons to flow.
Dual-phase flow (gas and liquid together) during early clean-up is a positive indicator of reservoir pressure and deliverability. This phase precedes the formal production test that will determine commercial flow rates. The rates observed during unstable flow and surges occur as different stimulation zones of the well enter gas-condensate production whilst others remain in fluid flow-back mode.
Flow-back metrics help investors assess whether the stimulation was successful before the company commits to extended production testing. The 32% recovery rate observed at Lorelle-3H compares favourably to offset data, suggesting effective reservoir connectivity.
Tubing installation to stabilise surging flows
Gas and fluid surging as production ramped up has necessitated running a pre-prepared 2-3/8″ tubing string. The technical reason is that different stimulation zones entering gas-condensate production at different times creates pressure fluctuations.
This phenomenon has precedent at Daydream-2, where similar surging caused condensate dew pointing and fracture network instability. Short-term instantaneous impacts on bottom hole pressures can cause condensate drop-out, creating instability in the fracture network. The well has been shut in during tubing installation, expected to take up to 7 days.
The shut-in period will also allow further soaking of stimulation fluid away from the well, improving near wellbore permeability, which may further enhance the ultimate productivity of the well. The decision to pause and install tubing reflects operational discipline to protect long-term well performance rather than risking the fracture network for short-term data.
Forward programme and production testing timeline
Post-tubing installation, production testing will recommence. The objective is to open the well up and achieve maximum gas and condensate production rate, moving the well from dual-phase clean-up into uniform single-phase flow.
The flow test has four key objectives:
- Proving that gas and condensate can be flowed at rates and pressures from multi-stage stimulated horizontal wells in the Tinowon ‘Dunk’ Sandstone to support a commercial development
- Supporting modelling that recoveries of commercial quantities of gas and condensate from multi-stage stimulated horizontal wells in the Tinowon ‘Dunk’ Sandstone can be achieved
- Measuring gas and condensate ratios and compositions to support preparatory works for development
- Measuring and recording pressures, temperatures and other key flowing conditions in order to support the preparatory work required for development
Successful flow testing would support a potential maiden Reserve conversion from the underlying Contingent Resource. The expanded evaluation campaign and methodical approach to de-risking the Basin Centred Gas Play positions the well to deliver commercially meaningful data.
Lorelle-3H well specifications and appraisal context
Lorelle-3 is a two-phase drilling programme in ATP2056. The joint venture structure comprises 50% Elixir (operator of the L3/L3H appraisal well) and 50% Santos Limited (permit operator thereafter). The pilot hole was drilled to 3,580m total vertical depth, collecting core and logs in an expanded evaluation programme across various Permian sandstone reservoirs within the Taroom Trough.
Petrophysical results exceeded expectations, demonstrating multiple thick gas and gas-condensate bearing reservoirs as viable appraisal targets amongst 148m of measured net gas-condensate pay. The horizontal sidetrack extended 1,157m into the Tinowon ‘Dunk’ Sandstone at 3,332m measured depth, cased and stimulated across 12 stages.
| Parameter | Detail |
|---|---|
| Location | ATP2056, Taroom Trough |
| JV Structure | 50% Elixir (operator) / 50% Santos |
| Pilot hole depth | 3,580m TVD |
| Horizontal sidetrack length | 1,157m |
| Target formation | Tinowon ‘Dunk’ Sandstone |
| Measured depth | 3,332m below rotary table |
| Stimulation stages | 12 |
The data and core gathered from the expanded evaluation campaign led into a series of experiments and laboratory work that have supported the design and execution of an optimal stimulation. The well design and expanded evaluation campaign represent a methodical approach to de-risking the Basin Centred Gas Play.
R&D Tax Incentive eligibility
The Lorelle-3 well costs qualify for up to 48.5% refund via the Federal Government’s R&D Tax Incentive. Qualifying activities include drilling, coring, logging, analysis, completion, stimulation and testing of the well. This is via an Advanced Finding that Lorelle-3 has qualified for under the tax return process.
The tax offset materially reduces the net capital deployed on the appraisal programme, improving project economics. The refund applies to the L3/L3H appraisal well costs associated with qualifying activities.
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Strategic positioning in the Taroom Trough
Elixir is the largest acreage holder in the Taroom Trough. The company holds approximately 3.5 TCF of independently certified 2C Contingent Gas Resources. The Taroom Trough is described as a multi-TCF Basin Centred Gas Play.
Infrastructure proximity provides material development advantages:
- Wallumbilla Gas Hub immediate access
- Multiple gas pipelines
- 25 mtpa LNG export infrastructure
- Multiple operating refineries
- Mature and well-serviced onshore gas industry in Queensland
Lorelle-3H is the first horizontal well drilled and to be tested outside Shell’s acreage on the upper western flank of the Taroom Trough. The well demonstrates both a northern extension of Shell’s primary area of operations and drilling-testing results within the Tinowon ‘Dunk’ Sands.
Successful appraisal results would validate the quality of Elixir’s acreage position adjacent to Shell’s primary Taroom Trough investment area. The results to date validate the value, quality and materiality of Elixir’s substantial Taroom Trough acreage position.
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