Elixir Energy Ltd (ASX:EXR) continues to progress coal bed methane (CBM) operations in Mongolia’s South Gobi Basin adjacent to energy-hungry China with the Nomgon Pilot Project returning to managed flare and the Nomgon-10 pilot well to spud at the end of this month.
Elsewhere on the 100%-owned Nomgon IX CBM Production Sharing Contract (PSC) the Big Slope-7 appraisal core hole has been completed and thick coals have been intersected with good desorption.
Nomgon Pilot Project
Nomgon Pilot Project operations continue with the pilot plant now returning to managed gas production, including a managed flare.
During the last month both wells have been produced intermittently whilst the production team varied casing pressures, pump rates and water levels.
Water production throughout this has remained relatively static at rates of 110-120 barrels of water per day.
Whilst the gas rate is still lower than the original flow rates at the beginning of the test, a clear increasing trend is now emerging.
Elixir’s managing director Neil Young said: “The Nomgon Pilot Project has experienced some almost inevitable variations in gas flow rates – it is the first in the country – and it pleasing to see how our team has been learning on multiple fronts from the data and experience garnered to date.
"We look forward to the next pilot well adding to the results in the short term.”
Nomgon-10 pilot well
The company’s additional pilot well, Nomgon-10, will spud towards the end of this month, using international drilling contractor Major Drilling. Existing pilot wells will be shut in during this drilling operation.
Upon completion of this new drilling, the lesser performing Nomgon-8 will be temporarily suspended and the Nomgon-10 production well will replace it in the production system.
Location of Elixir’s current drilling activities in Mongolia.
Coals intersected at Big Slope-7
Elixir has completed the Big Slope-7 appraisal core hole, which was drilled to a depth of 666 metres.
The drilling was curtailed slightly ahead of the originally planned total depth due to difficult hole conditions.
There were 35 metres of coal and 7 metres of silty coal intersected, with one Drill Stem Test (DST) conducted. Interpretation of the results of the DST will be announced by EXR in due course.
Erdene drilling rig at Big Slope-7.
This well was drilled by Mongolian drilling contractor Erdene Drilling LLC and is the first of a number of wells it is contracted to Elixir for drilling in the region.
The rig has moved to a nearby location to the west of the previous well to drill a core hole - Big Slope Shallow-1 - where it will appraise the shallower coals at deeper locations.
Second rig
Erdene Drilling has also brought a second rig into the basin and will replace Top Diamond Drilling as the company’s primary exploration drilling contractor.
Top Diamond Drilling completed the drilling of the Bluebill-1S exploration well recently, with the well intersecting gaseous coal in cuttings.