Elixir Energy

Overview

Elixir Energy (ASX:EXR) is a gas exploration and development company currently focused on its portfolio of natural gas and hydrogen assets in Mongolia and in Queensland, Australia. As an early mover in Mongolia, Elixir Energy is the first company ever to flow gas in the country.

The clean hydrogen market is rapidly emerging and is expected to become an ever-expanding part of the global energy mix by 2030. This projection sets the stage for Elixir Energy to reach production from its in-development Gobi H2 hydrogen project in Mongolia and have an early mover advantage in a sector that is attracting global attention from the world’s largest companies.

Elixir Energy recently began developing the Gobi H2 green hydrogen project in Mongolia. The project has exceptional renewable resource inputs and the potential to become a world-class hydrogen asset. The company has a maturing 50/50 partnership with Japan’s Terras Energy in this project which earlier this year moved to the point of Term Sheet execution.

There are two compelling advantages to developing hydrogen assets in Mongolia: access to very high quality renewable energy and proximity to the emerging hydrogen market in China – likely to be the world’s largest. In addition, Elixir Energy has the long-term potential to deliver hydrogen to China by pipeline rather than by boat, a significant cost advantage as development progresses.

In addition to the Gobi H2 hydrogen project, Elixir Energy’s Nomgon coal-bed methane (CBM) project is also located in Mongolia.

In Queensland, Elixir Energy acquired the Grandis Gas project last year and is currently moving towards drilling the Daydream-2 appraisal well in October 2023, that will seek to materially increase contingent resources, possibly book initial reserves and confirm liquids content.

The company is led by a team of managers with direct experience in Australia and Mongolia and expertise in the natural resources industry, community engagement and working with government stakeholders.

Company Highlights

• Elixir Energy (ASX:EXR) is an exploration and development company with energy assets in Mongolia and Australia, targeting both natural gas and renewable energy/hydrogen.
• The company was the first to flow natural gas in Mongolia, pioneering production in the country.
• Elixir has two projects in Mongolia and a growing gas resource in Australia that cover a range of ever-cleaner energy sources of the type global markets are increasingly demanding.
• The market for clean hydrogen has been steadily growing as technology has improved and carbon reduction goals have increased, allowing Elixir’s Gobi H2 hydrogen project to potentially commence production just as demand skyrockets.
• The Gobi H2 project is also near China – allowing delivery by pipeline rather than boat, facilitating much lower-cost deliveries.
• Elixir’s confidential pre-feasibility study (PFS) results led to an expanded memorandum of understanding with Terras Energy (now majority-owned by a member of the Toyota group), providing a framework to enter into a binding 50/50 joint venture.
• Elixir Energy’s Nomgon CBM asset’s pilot plant surpassed the initial milestone of 200,000 square cubic feet per day and has recently been expanded with another well being added.
• The company’s Grandis Gas project in Queensland is located in an established gas and oil region and is moving towards a very high-impact appraisal next month.
• A management team with a range of expertise in the natural resource sector leads Elixir Energy towards capitalizing on its assets.

Key Projects

Gobi H2 Hydrogen Project

The Gobi H2 project aims to capitalize on emerging opportunities in the clean hydrogen market. The project is ideally located for cost-effective transportation, and the company is aiming to enter into FEED for an initial pilot plant.

Project Highlights:

• Pre-feasibility Study (PFS): Elixir Energy has procured a PFS to support the development of a pilot plant as the project takes steps forward to reach full production.
• Partnership with Terras Energy (renamed from SB Energy following its acquisition by Toyota Tsusho): The company recently signed a Term Sheet with SB Energy to explore and develop the asset mutually. Terras Energy is already operating a world-class wind farm in the region and will lend its expertise to Elixir’s future plans for the asset.
• Ideal Hydrogen Delivery Cost: A significant advantage of the project is the potential for much lower delivery costs once production begins. The project would facilitate delivery by pipeline, allowing the company to transport hydrogen by land, rather than sea, creating significant cost savings.

Nomgon CBM Project

Elixir Energy’s 100-percent-owned coal-bed methane (CBM) project is ideally located in the South Gobi region of Mongolia. This location gives the asset access to robust local infrastructure and close access to Chinese energy markets – the world’s largest.

Project Highlights:

• CBM Pilot Project In Production: The pilot plant has passed a key production milestone of 200,000 square cubic feet per day earlier this year. Water production has also remained stable at ~150 barrels per day. Both of these results are promising as the asset continues to move forward – with another pilot well currently being added to the Project.
• 2023 Drilling Program Underway: Exploration began in 2019, and the first CBM discovery was made in 2020. The 2023 drilling program is currently underway.
• District-scale Asset: The Nomgon project covers a significant 30,000 square kilometers in Mongolia. Initial exploration campaigns have been promising and indicate the potential for the asset to become a significant producer of regional energy markets.

Grandis Gas Project

The company’s asset in Queensland, Australia, covers approximately 1,000 square kilometers in an established oil and gas province. The project is well-suited for cost-effective transportation to domestic and international oil markets.

Project Highlights:

• Strong Local Infrastructure: The region's long history of oil and gas production has resulted in a robust infrastructure, including transportation and power access – and community support for the industry.
• Adjacent to Current and Proposed Pipelines: The asset is located close to existing – and proposed gas pipelines to assist in efficient and low-cost transportation as production commences.
• Well Planning Underway: Elixir Energy is currently working towards spudding the Daydream-2 appraisal well in October this year.

Management Team

Richard Cottee - Non-executive Chairman

Richard Cottee was appointed as the non-executive chairman of the company on April 29, 2019. Cottee was the managing director of coal-seam-gas(CSG)-focused Queensland Gas Company (QGC) during its growth from a $20-million market capitalization junior explorer through to its acquisition by BG Group for $5.7 billion. QGC’s CSG assets are now operated by Shell and produce gas that is sold to China and other LNG markets.

Originally a lawyer, Cottee has spent the vast majority of his career in senior executive roles in the energy industry, including as CEO at CS Energy, NRG Europe, Central Petroleum and Nexus Energy. A 32-year veteran of the industry, Cottee is a strong business development professional and a graduate of The University of Queensland.

Neil Young - Managing Director and Chief Executive Officer

Neil Young was appointed to the board of Elixir on December 14, 2018, as its chief executive officer. Young has more than 20 years of experience in senior management positions in the upstream and downstream parts of the energy sector, focusing on business development, new ventures, gas marketing and general commercial functions. He has worked for a range of companies in the UK and Australia, including EY, Tarong Energy and Santos. Young founded Golden Horde Ltd in 2011 with a view to exploring gas on the Chinese border in Mongolia. He has also developed various new ventures in other countries including Kazakhstan, Japan and the USA. Young has an M.A. (Hons) joint degree in economics/politics from the University of Edinburgh.

Stephen Kelemen - Non-executive Director

Stephen Kelemen was appointed as the non-executive director of the company on May 6, 2019. Kelemen led Santos’ coal seam gas (CSG) team from its inception in 2004 and drove the growth in this area that allowed Santos to become one of Australia’s leading CSG companies. An engineering graduate from Adelaide University, Kelemen served Santos for 38 years in multiple technical and leadership roles.

Kelemen is currently an adjunct professor at the University of Queensland’s Centre for Coal Seam Gas and also acts as a non-executive director on the boards of Galilee Energy (ASX:GLL) and Advent Energy Ltd.

Anna Sloboda - Non-executive Director

Anna Sloboda was appointed as the non-executive director of the company on October 1, 2020. Sloboda is a joint Belarusian/Australian citizen and has more than 20 years of experience in corporate finance, and in developing junior resource companies operating around the world.

Sloboda is currently an executive director of Red Citadel Resources Pty Ltd, a privately owned mineral resources exploration company with a range of projects in Africa and South America. She also serves as an advisory committee member, maritime archaeology, at the Western Australian Museum.

Previously she was a co-founder of Trans-Tasman Resources and in that capacity had substantial experience in dealing with Chinese off-takers and partners. Other prior employers include Lehman Brothers, Clough and Curtin University.

Sloboda has a Master of Economics from Belarusian University and an executive MBA from Melbourne Business School.

Victoria Allinson - Company Secretary and Chief Financial Officer

Victoria Allinson is a fellow of The Association of Certified Chartered Accountants, a fellow of the Governance Institute of Australia and an NSX-nominated advisor. She has more than 30 years of accounting and auditing experience, including senior accounting positions in a number of listed companies and was an audit manager for Deloitte Touche Tohmatsu. Allinson has gained professional experience while living and working in both Australia and the United Kingdom.

Her previous experience has included being company secretary and CFO for a number of listed companies, including ASX-listed: Kiland, Safety Medical Products, Marmota Limited, Centrex Metals, Adelaide Energy, Enterprise Energy NL, and Island Sky Australia as well as a number of unlisted companies.