ASX-listed gas exploration and development company Elixir Energy (ASX:EXR) reports it has commenced pumping at its Nomgon coal bed methane (CBM) pilot project in Mongolia.
The commencement of pumping comes following the completion of drilling at the project’s Nomgon-8 and 9 pilot wells last month by Major Drilling and has resulted in an early breakthrough of gas, which is consistent with the company’s interpretation that coal is close to 100% gas saturated.
It is reported that this early breakthrough of gas is currently being flared and as the gas begins to stabilise, the company reports it will commence measurement of the rate.
However, 1 of the 2 wells is already exhibiting slugging and may require workover in coming days, which will be undertaken by a Major Drilling rig currently enroute to the Big Slope depo-centre to aid in ongoing appraisal drilling.
Addressing the flaring gas, Elixir Energy’s Managing Director, Neil Young said: “Flaring gas so soon after starting our production pilot is an incredible result for the company. This is a first for Mongolia and we aim to establish a commercial flow rate in the months to come.
“Flaring gas so soon after starting our production pilot is an incredible result for the company.”
Our on-site team – with great assistance as always from their Australian counterparts – has done a fantastic job in installing pilot facilities to a world class standard and we thank them accordingly.”
The current ongoing drilling at the Big Slope-3 and 4 wells have intersected 21.4 and 38 metres of gassy coal respectively to date and are expected to reach their target depths within the next week.
Gas contents measured from these wells have successfully followed up on the equally high figures generated in Big Slope-2, with Big Slope-3 returning peak values of up to 9.2 cubic metres per tonne, which represents the highest value returned to date from the Nomgon IX CBM.
However, the pace of the drilling at Big Slope has recently been affected by a variety of mechanical and geological issues, resulting in Elixir Energy contacting Major Drilling to deploy a rig that boasts stronger drilling capabilities than the rigs currently operating.
As of 4pm (AEST) Elixir Energy’s share price has increased by 12.49%.
Elixir Energy is an ASX-listed gas exploration and development company primarily focused on an exploration and appraisal program in Mongolia, targeting natural gas in the form of coal-bed methane (CBM). The company’s Nomgon project is currently being developed within its 100% CBM production sharing contract (PSC), located to the north of the Mongolian/Chinese border and covers a total land area of 30,000km-square.
Elixir Energy announces it remains focused on establishing a commercial flow rate for the flaring gas in the months to come.
Images: Elixir Energy Ltd