This ASX energy stock just crashed 58%! Here's why

The ASX energy stock lost more than half its market value on Tuesday morning. But why?

| More on:
A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX energy stock Elixir Energy Ltd (ASX: EXR) is having a day to forget.

As are the company's shareholders.

Yesterday the Elixir Energy share price closed the day at 16.5 cents. In early trade, shares crashed all the way to 7.0 cents apiece, down 57.6%. After some likely bargain hunting, shares are trading for 7.4 cents each, down 55.2%.

Created with Highcharts 11.4.3Elixir Energy PriceZoom1M3M6MYTD1Y5Y10YALL1 Oct 202313 May 2025Zoom ▾Oct '23Jan '24Apr '24Jul '24Oct '24Jan '25Apr '25Jan '24Jan '24Jul '24Jul '24Jan '25Jan '25www.fool.com.au

For some context, the All Ordinaries Index (ASX: XAO) is down 0.1% at this same time, while the S&P/ASX 200 Energy Index (ASX: XEJ) is up 1.3%.

This stark underperformance for the junior ASX energy stock comes on the heels of an operational update.

ASX energy stock hammered on well results

Elixir Energy has been keeping the market regularly updated on the progress at its Daydream-2 well. The well is situated in its 100% owned Project Grandis in Queensland's Taroom Trough.

Over the previous month, investor optimism over the potential on tap here saw the ASX energy stock gain more than 21%. Until this morning's opening bell, that is.

Today, Elixir shares are under pressure after the company announced that it has concluded its testing program.

While Daydream-2 delivered gas flow rates from five out of the six stimulated zones – including for the first time in two separate deep coal zones – the stabilised flow rate was less than previously measured.

The company revealed a maximum flow rate of 2.6 MMSCFD with a stabilised rate of 1.0 MMCFPD prior to shut in.

Management attributed the reduction in the stabilised rate to condensate or water banking immediately around the wellbore. The cause was said to likely be the multiple open and closures of the well during recent operations or by adverse reactions to fluids introduced into the wellbore.

While the ASX energy stock stressed that these kinds of issues are "common in early stage tight gas plays globally" and said this can be remedied by operational changes to fluid use and well management, investors are still favouring their sell buttons.

The company also noted that the well is being retained through a process of suspension as a future gas producer, and that it is proceeding with a process of applying for the licence to be deemed a retention lease.

Commenting on the well test results putting the ASX energy stock under heavy pressure today, Elixir's managing director Neil Young said, "The Daydream-2 appraisal program has massively exceeded our expectations of more than two years ago when we acquired Project Grandis."

Young added:

Our work – combined with that of our various neighbours – is opening up vitally needed and very material gas resources for Gladstone, Queensland and Australia. The extensive data gathered to date will inform possible pathways to production.

We expect our discussions with potential partners will now likely be accelerated as the global oil and gas industry turns its eye to the enormous opportunities in the Taroom Trough.

The ASX energy stock said the planning of the Daydream-3 appraisal well in the Grandis Project is in progress. This will focus on further de-risking the gas resources its now established.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Healius, Light & Wonder, REA Group, and Regis Resources shares are falling today

These shares are ending the week in the red. Let's find out why.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ANZ, Brainchip, Light & Wonder, and Pilbara Minerals shares are falling today

These shares are tumbling on Thursday. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Aurizon, JB Hi-FI, Nuix, and Platinum shares are tumbling today

These shares are falling on hump day. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why HMC Capital, Platinum, Sigma, and Skycity shares are dropping today

These shares are having a tough session on Tuesday. But why?

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

ASX 200 energy shares plunge on shock OPEC move

ASX 200 energy shares like Woodside and Santos are tumbling on Monday. Let’s find out why.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Brainchip, Helia Group, Reliance Worldwide, and Westpac shares are dropping today

These shares are starting the week in the red. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Corporate Travel Management, Judo, and Zip shares are sinking today

These shares are missing out on the good times on Friday. But why?

Read more »

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Share Fallers

These were the worst-performing ASX 200 shares in April

These shares were out of form last month. But why?

Read more »