Talon Energy Ltd (ASX:TPD) has progressed its strategy to provide a new energy source to Mongolia and its neighbour China with the first gas from the Lucky Fox-1 pilot well at the Gurvantes XXXV CSG Project flowed to the surface and flared.
This comes as joint venture partner and operator of the CSG project in the South Gobi Basin of Mongolia, TMK Energy Ltd (67%), advises Talon (33%) that the Pilot Well Program continues to deliver in line with expectations.
Initial gas from buildup in the casing of the Lucky Fox-1 well was yesterday flowed to the surface and flared, representing the first gas flowed to surface for the Gurvantes XXXV Project.
The well flowed for around three hours, providing the partners with valuable data and also demonstrating the ability to flow gas from the coal seams being targeted by the project.
Pressure decreasing
Since commissioning about a week ago, all three wells have been continuously on pump and the pump speeds have been gradually increased to slowly reduce fluid levels in the wells and hydrostatic pressure in the reservoir.
The wells are producing at a rate of approximately 500 bwpd (combined) and the fluid levels are continuing to slowly decrease in line with expectations.
“Promising early signs”
Talon’s managing director and chief executive officer Colby Hauser said: “We are pleased to announce the positive results from the extended production test and the promising early signs from the performance of the three pilot wells and we look forward to updating the market further.”
During the coming weeks, pump speeds will continue to be gradually increased and as the fluid levels decrease, the reservoir begins to depressurise after which more substantive and continuous gas desorption from the coals is expected to begin.
Further flaring
TMK advises that this process may take several weeks or months and as more data becomes available, the partners will continue to keep the market updated on the key metrics.
Further flaring of gas from pressure buildup is likely to occur over the coming weeks as more coal seams in the reservoir reach critical desorption pressure.
Although the initial gas produced and flared is considered a positive early indicator, the flow was unsustained and is, therefore, not necessarily indicative of what levels of sustained gas flow rates may be achieved in the future from this well or others in the project area.