Daydream-2 Operations Update

Elixir Energy Limited (“Elixir” or the “Company”) is pleased to provide an operations update on its 100% owned Grandis project located adjacent to the Wallumbilla gas hub in Queensland.

HIGHLIGHTS

• Lorelle Sandstone successfully stimulated and cleaned up
• Computer models based on the data acquired during testing indicates the Lorelle Sandstone alone could produce a commercial flow rate¹
• Contractor scheduling and other operational issues have led to a small delay in the rest of the program

Following the recent successful free-flowing test on the Lorelle Sandstone, Elixir advises that this key formation has now been successfully stimulated. The zone was flowed back overnight to clean out the stage, and again flowed gas to surface with slugs of proppant debris and stimulation fluid as expected.

Gas flow from Stage 1 Lorelle Sandstone post stimulation

Data acquired during the Lorelle Sandstone flow periods has been used to predict the initial gas flow rate and ultimate recovery for each well from this lowermost zone. Elixir’s technical and economic modelling¹ indicates the Lorelle Sandstone alone could produce a commercial flow rate of gas, with the breakeven commercial initial flowrate being estimated at 2.5 million cubic feet per day¹.

This commerciality threshold is strongly underpinned by the location of the Grandis Project only a few tens of kilometres from: gas pipeline infrastructure connecting to domestic and international gas markets; existing and proposed local gas-fired power stations; a commercial gas hub into which spot sales can be made at high gas prices; etc. Accordingly, plans for a staged development are already underway, including engaging with gas offtakers with interests in the region.

Since the stimulation and flow-back of the Lorelle Sandstone, Elixir has sustained a number of logistical and other operational delays. After successfully isolating the Lorelle Sandstone with a bridge plug to proceed with the next stimulation stage, the setting mechanism became lodged in the hole requiring remedial activity. This delay has resulted in the full stimulation program not being able to be completed before the hard deadline for certain equipment to leave the site to meet commitments with another operator.

Stimulation equipment on location at Daydream-2

Accordingly, Elixir has demobilized at Daydream-2 and will re-commence the stimulation program in a month or so. This will ensure that the program can be executed as planned and there are no negatives for the ultimate program except for this time delay. Negotiations with the relevant sub- contractors are in hand and a more precise timetable is expected to be finalized shortly.

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