Company Overview

Elixir Energy Limited (ASX: EXR) is an Australian energy exploration and development company with a diversified portfolio spanning natural gas and hydrogen projects across Australia, Mongolia, and the United States. Its primary near-term focus is Queensland's Taroom Trough, where the company is advancing acreage retention, reserve-definition drilling, and early-development work with the stated goal of converting gas resources into reserves and achieving small-scale commercial production by late 2027. Backed by fresh equity funding and a revised board structure, Elixir is actively transitioning from its early exploration phases toward first production.

Segments and Field of Activity

Elixir Energy's core operational focus is on natural gas exploration, specifically targeting coal seam gas and coal-bed methane resources. Its flagship domestic asset is the Grandis Gas Project, which covers approximately 1,000 square kilometers within the Taroom Trough of Queensland's Bowen Basin. Internationally, the company operates the 30,000-square-kilometre Nomgon IX project in Mongolia, alongside early-stage Mongolian green hydrogen and solar energy initiatives.

Strategic Initiatives and Growth

The company is currently executing a three-phase strategic plan in the Taroom Trough, positioning itself as a "fast follower" that can leverage neighboring infrastructure and regional investments. This ongoing strategy aims to convert 150 billion cubic feet of 2C contingent resources into proven 2P reserves to facilitate early-stage commercial production by the end of 2027. Furthermore, Elixir recently secured a strategic gas partnership with the APA Group in April 2026 to help advance these infrastructure and development goals.

After a year of steady growth, what factors subsequently caused Elixir Energy (ASX: EXR)'s stock price to decline?

Elixir Energy (ASX: EXR) shares have a volatile history, rising during exploration cycles of excitement and falling as operational and financial realities set in. In early 2025, EXR was trading at just around A$0.02-0.03 per share, a far cry from previous highs, but by April 2026, it had recovered significantly, rising over 635% year-to-date.

Here are several converging factors have caused the share price of Elixir Energy to decline after a period of positive momentum:

1- Shareholder Dilution and Discounted Capital Raises

To support its capital-intensive exploration, Elixir Energy has consistently turned to equity financing, resulting in significant shareholder dilution. Most recently, in early 2026, the company sold 10 million new shares at a deep discount to fund multi-stage fracturing at its Lorelle-3 well.

2- Severe Cash Burn and Financial Losses

As a pre-revenue explorer, Elixir Energy is depleting its cash reserves with no operating income. It posted a net loss of AUD 41.21 million (including a non-cash write-down of AUD 38.39 million) and negative free cash flow of AUD 14.89 million, leaving it reliant on unpredictable external funding.

3- Fluctuating Gas Flow Rates

Although recent drilling has shown promise, unstable flow rates have historically triggered sell-offs and caution. For instance, the Daydream-2 well's rate dropped from 2.6 MMSCFD (peak) to just 1.0 MMSCFD (stabilised) due to condensate and water buildup, creating uncertainty about commercial viability and production timelines.

4- Frontier and Structural Risks

Elixir’s exposure to frontier basins, particularly the Nomgon IX Coal Bed Methane project in Mongolia, adds significant sovereign and logistical risks. Unlike its peers operating within established Australian infrastructure, Elixir faces complex cross-border supply chain hurdles and regulatory uncertainties to reach Chinese energy markets.

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Technical Analysis of Elixir Energy (ASX: EXR)

Source: TradingView

Price action

From December 2025 to early March 2026, EXR formed a strong and sustained uptrend in the form of an ascending channel. In late March 2026, a sharp breakout above the channel occurred, and the price reached an all-time high of $0.175.

After this bullish surge, the market entered a distribution and pullback phase, and the price returned to the key support zone 1 in the range of $0.130 to $0.135. The current candle is located just above the support zone, indicating that the market is at a critical decision point.

Key Price Levels

Support 1~ 0.130: Immediate tactical support level (Support level 1 + 50% Fibonacci). This level must hold for the uptrend to continue."

Support 2~ 0.1: A deeper correction target may emerge, prompting cautious traders to enter as they seek to reduce risk appetite.

Resistance: The primary overhead resistance is the recent swing high at 0.170 (the 0% Fibonacci level)

Stop Loss ~0.1-0.9: A daily close below this level would mean breaking both the channel structure and Support 2, invalidating the current bullish thesis.

Volume

Volume increased significantly during the April breakout, supporting the view that the move was driven by strong buyers. Since the peak, volume has declined and become less aggressive, which is normal during a consolidation, but it also suggests that buyers have yet to signal a continuation of the trend.

To confirm the new uptrend, we need to see a strong green candle through resistance, along with a higher average volume.

RSI~55

The RSI panel is now around 54.6, after recently reaching the overbought zone above 70 during the breakout. This suggests momentum has calmed but is not yet bearish, as the RSI remains above 50 and in the neutral or positive zone.

From a technical perspective, RSI support is found around the 50 area. If the RSI stays there and moves above 13.0 cents while the price holds, this will indicate a continuation of the trend, while a drop below 50 and then 40 would indicate weakening momentum.

FAQs about Elixir Energy (ASX: EXR)

1- What are Elixir's upcoming catalysts?

To address this, key catalysts for Elixir include further drilling and appraisal programs in the Taroom Trough (including the Lorelle-3H well), seismic data acquisition, production testing, and updates regarding its joint venture activities with Santos.

2- Does Elixir have a strong balance sheet?

Regarding its financial health, Elixir's position fluctuates due to exploration costs. While its cash reserves dropped significantly from FY2021 to FY2024, recent strategic capital raises in late 2025 and early 2026 have secured funding for its near-term operational and drilling plans.

3- What happened at the Daydream-2 well?

The Daydream-2 appraisal well is a key exploration site in Queensland. Although the well successfully brought gas from deep coal seams to flow, the initial stabilised flow rate did not meet high market expectations, and the share price fell by almost 58% in October 2024.