Talon Energy Ltd (ASX:TPD) welcomes the start of a pilot well drilling program by its partner TMK Energy Ltd at the Gurvantes XXXV CSG Project in the South Gobi Desert in Mongolia.
Primarily funded by the project's 33% owner Talon, the pilot program began with the spudding of the Lucky Fox - 1 (LF-01) pilot production well, which will be the first of three production wells using international drilling contractor, Major Drilling.
Talon elected to enter stage 2 of the farm-in agreement in early December and is paying the first US$3.15 million towards what is budgeted to be around US$3.5 million, with the two companies paying their proportionate share of further costs over and above US$3.15 million.
After the completion of drilling, the pilot well pumps will then be commissioned to initiate a controlled dewatering process, with the first gas breakthrough expected to occur within one to two months after production begins.
First step toward commercialisation
TMK CEO Brendan Stats said: “The spudding of our first pilot production well, Lucky Fox - 1, is a tremendous achievement for the company after such a short lead time.
“Our first exploration well (Snow Leopard - 01) was drilled approximately 12 months ago, so to now be commencing our first pilot production well in such a short timeframe speaks to the quality of both the asset and the team we have in place.
“We look forward with great anticipation and expectations towards a successful drilling program that will be yet another milestone in the project development as we aim to flow first gas to surface and take our first step toward commercialisation, demonstrating the potential of coal seam gas (CSG) in the Gurvantes Project.”
Forward plan
The pilot well program includes the drilling of three individual production wells spaced approximately 200 metres apart and centred on the SL-02 exploration well which was drilled during the maiden exploration program in 2022.
The drilling of the three production wells is expected to take approximately seven weeks.
Once drilling is completed, downhole pumps will be installed and surface facilities will be connected to the wells which are expected to take approximately four weeks from the completion of drilling.
The pilot well pumps will then be commissioned and the dewatering process will commence in a controlled manner with first gas breakthrough expected within one or two months of being placed on production.