Xstate Resources (ASX: XST) JV Named Preferred Tenderer for Taroom Trough Block

Xstate Resources has expanded its Queensland oil and gas footprint after its joint venture was named preferred tenderer for a 305-square-kilometre exploration block on the eastern flank of the Taroom Trough.

The company will hold a 25% working interest in Block PLR2026-1-7 and serve as the joint venture’s initial operator. Amplitude Energy, Betaloo Energy and Eastern States Energy will each hold a further 25% interest.

The acreage sits between Condamine and Miles in Queensland’s Western Downs, within the broader Surat over Bowen Basin. Its location is central to the investment case: Block 7 is adjacent to and along trend from Omega Oil & Gas’s Canyon project, which is being drilled and appraised, and is close to existing pipelines and industry services.

Preferred tenderer status does not yet constitute an unconditional grant. Xstate must complete remaining Queensland Government processes, including initiating a Native Title process and lodging an Environmental Authority.

Early work focused on subsurface assessment

The initial work commitment comprises seismic processing and early-stage geological and geophysical activities. Xstate did not disclose the expected cost, funding arrangements or timetable for that program.

The company said the block contains stacked, overpressured Permian reservoir intervals associated with a basin-centred gas play. Recent exploration elsewhere in the Taroom Trough has identified basin-centred gas alongside associated liquids and light crude oil, although Xstate has not reported a resource estimate for its newly awarded acreage.

That distinction is important for investors: the block adds exploration exposure and operating responsibility, but remains at an early stage. Seismic and geological work will be required before the joint venture can define targets and assess whether further appraisal is warranted.

Managing Director Andrew Bald said the partners were preparing to begin field activities.

“We are already preparing to commence work on the ground and our joint venture partners bring a wealth of expertise,” Bald said.

Broader Queensland portfolio

The preferred tenderer award adds a second disclosed Queensland focus for Xstate alongside its Diona project. The company owns 51% of the Diona block within ATP 2077 and spudded the Diona-1 well on September 27, 2025.

At Taroom, Xstate’s 25% interest limits its direct economic exposure relative to a wholly owned project, while its operator role gives it responsibility for coordinating the initial exploration program. The joint venture structure also spreads the cost and risk among four equal participants.

The immediate steps are regulatory rather than drilling-related. Completion of the Native Title and environmental processes is required before the tenure grant is finalised, after which the partners can progress the agreed seismic, geological and geophysical work.