Elixir Energy has confirmed that Beach Energy is eyeing a farm-in to its Taroom Trough gas portfolio.

Responding to an article in The Australian, Elixir said the companies entered a process deed last month to provide a period of hard exclusivity, due diligence and negotiations to explore the potential deal.

‘The company gives no assurance that these negotiations will result in any transaction. The board will keep shareholders informed of any material developments in accordance with the company’s continuous disclosure obligations under the ASX listing rules,’ it stated in an update to the market.

Upon raising $5 million in a placement last month, Elixir announced it was launching a review to find the best corporate and commercial strategy to advance its Taroom Trough interests.

The options being considered included a farm-out, potential strategic partnerships, joint ventures or other structures, it said.

The company’s total independently certified 2C contingent gas resources in the area stand around 3.5 TCFe. 

Related: Elixir maps path to market for Taroom Trough gas

Beach Energy (ASX:BPT) already has interests in the Taroom Trough.

It is part of an Omega Oil and Gas-led joint venture including Tri-Star (operator) that was appointed as preferred tenderer early this year to explore for gas and petroleum on PLR20251-9.