Talon Energy Ltd (ASX:TPD) welcomes the progress being made by partner TMK Energy Ltd at the Gurvantes XXXV CSG Project in the South Gobi Basin in Mongolia.
TMK has acquired two 10-kilometre 2D seismic lines across discovered coal deposits in the northern and southern regions of the project and is also making progress with an upcoming pilot well program.
Farm-in agreement
Subject to Talon Energy exercising its option to proceed to Stage 2 of its farm-in agreement with TMK, this pilot well program will be primarily funded by Talon.
Talon is required to exercise its option to proceed to the second stage on or before December 25, 2022, and has advised TMK that it expects to do so.
De-risking 2U Prospective Resource
Acquisition of the seismic lines will assist TMK to continue to de-risk the significant 2U Prospective Resource already independently assessed by Netherland, Sewell and Associates (NSAI).
These seismic lines were acquired over areas where coal seams are exposed at shallow depth and will aid in the planning of future exploration drilling programs.
The first 10-kilometre 2D seismic line was acquired across the Noyon Syncline field in the north of the Gurvantes XXXV Project area, where coal units have been mapped on both the north and south limbs of a broad syncline striking east-west for more than 80 kilometres.
The second line was acquired in the Khukhuzokh field targeting coal units exposed at surface, interpreted to be an extension of coal units from the Nariin Sukhiat field.
This was the focus of a successful drilling program earlier this year that delivered a 2C Contingent Resource of approximately 1.2TCF.
Pilot well program preparations
Preparations for the upcoming Pilot Well Program are well advanced with design work complete and tendering for contract services nearing completion.
This program will include the drilling of up to three production wells in proximity to the location of the Snow Leopard-02 (SL-02) well.
The results from SL-02 provide a high degree of confidence in achieving a successful outcome from the pilot well program.
Drilling of the pilot production wells is expected to commence in the middle of the first quarter of 2023.
Planning for 2023 program
TMK Energy’s chief executive officer Brendan Stats said: “Following the outstanding results achieved to date and the delivery of an initial 1.2TCF in contingent resources from the 2022 exploration drilling program, we are already planning for the 2023 exploration program with the completion of this small but targeted seismic acquisition.
"This new seismic data will help us refine our future drilling locations targeting the already significant prospective resources already independently assessed by NSAI.
"Our immediate focus is the finalisation of the engineering, design and tendering for the pilot well program which we expect to commence in early 2023 and is designed to demonstrate our proof of concept by flowing gas to surface at commercial rates.
The 2023 exploration drilling program, to be completed in parallel with the initial pilot well program, aims to continue to demonstrate the vast potential and scale of the Gurvantes XXV Project.”