Xstate Resources Surges 160% After Diona-1 Well Uncovers Promising Gas Zone

Xstate Resources (ASX: XST) stunned the market this week, soaring more than 160 percent in a single day after releasing a major operational update from its Diona-1 well in Queensland’s Surat-Bowen Basin. The excitement came after the company reported early signs of a potentially significant gas-bearing Permian sequence,a geological layer known to host large unconventional gas accumulations.

In simple terms, Xstate Resources may have drilled into a section rich in natural gas, encountering a 181-metre gas column at a depth of 2,479 metres. While these early results don’t yet confirm a commercial discovery, they suggest the company could be sitting on a much larger resource base than previously anticipated.

For investors, this discovery could mark a turning point for Xstate as it transitions from small-cap explorer to potential gas producer. But with early excitement often comes heightened risk and speculation.

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The Diona Prospect

Xstate Resources is a pre-revenue oil and gas explorer, with its flagship asset being the Diona Project in Queensland. The project is strategically located near several established gas fields and sits adjacent to a major gas pipeline, providing a clear pathway to market if production is confirmed. Diona targets three gas-bearing sandstone layers, all being tested through a single exploration well. 

If hydrocarbons are successfully identified across all three zones, Xstate’s net share of the potential resource is estimated at approximately 6.4 billion cubic feet of gas, a significant opportunity for a company of its size.

Xstate Maintains Strong Balance Sheet Ahead of Key Drilling Results