Elixir Energy Ltd (ASX:EXR) has spudded the first of two wells for pilot production in the wholly-owned Nomgon IX coal bed methane (CBM) production sharing contract (PSC) in Mongolia.
Two pilot wells, Nomgon-8 and Nomgon-9, will be drilled by contractor Major Drilling Group to reach a total depth of about 600 metres, respectively, and this work is anticipated to take less than 30 days to complete.
Elixir managing director Neil Young said: “Our pilot production project has been a key focus for our technical and operational teams for over a year now given the COVID and other logistical issues surrounding bringing in equipment from multiple countries.
"It is therefore great to see operations commencing - and our planned gas flows are hopefully now only a matter of months away.”
Equipment-ready
Sunset over the mud system at Nomgon-8.
Pilot production testing operations will begin within weeks of the wells being completed, with all testing equipment such as pumps, casing and generators already on site.
Elixir said water would initially be produced until the reservoir pressure was lowered and gas was able to be desorbed and flow, and subsequently flared during the production test. The timetable for this is uncertain as this is the first such test in the sub-basin.
Elixir will also be initiating a baseline environmental monitoring program surrounding the pilot area, also a first in the Gobi region. The program is over and above the relevant regulatory requirements.
Additional rig
Elixir has awarded the tender for an additional, more technically advanced rig to join the current three-rig exploration campaign to Major Drilling to improve drilling performance.
The contractor will introduce a larger mineral-style rig, with an advanced mud system and superior drilling supervision, at a cost-effective price.
Drilling operations using the new rig should commence within the next few weeks.
Well underway
Big Slope 1 well-site.
Since late July, the company has drilled the Bulag Suuj-2, Yangir5, Orio-1 and Big Slope-1 wells.
Coals intersected at the Bulag Suuj-2 were deeper than 1,000 metres at the down-dip step-out location, while the Orio-1 and Yangir-5 wells failed to reach their target depths due to various drilling problems.
Big Slope-1 is still drilling and has already cored about 10 metres of coal. Visible gas was seen along with the coals, and subject to final logging, could represent a new CBM discovery for Elixir.
“We have put in place various measures to improve our exploration drilling performance. This is a natural ongoing process in a country which is new to CBM and will be an area of continuous performance improvement,” MD Young said.
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