Talon Energy Ltd (ASX:TPD) welcomes progress by partner TMK Energy Ltd with the Gurvantes XXXV CSG Project’s pilot production well drilling program in the South Gobi Basin of Mongolia proceeding to plan.
The drilling by TMK Energy, which holds 67% and is the operator with Talon holding 33%, at Lucky Fox-1 (LF-01) has intersected 60 metres of gassy coal.
First of three wells spuds
LF-01, the first of three planned production wells at the project, spudded on April 12 and the well reached total depth on April 26, having been drilled to 375 metres as planned.
This well intersected 60 metres of thick, gassy coal in the production interval from 151 metres to 375 metres as prognosed by the operator and drilled safely, on time, and on budget by Major Drilling.
The drill rig is being mobilised to the Lucky Fox-2 (LF-02) well, some 200 metres from LF-01, in preparation for spudding of the second pilot production well in the program.
The Pilot Well Program, which is primarily funded by Talon as part of a staged farm-in process, involves the drilling and completion of three individual production wells spaced around 200 metres apart, centred around the Snow Leopard-2 well drilled last year.
Drilling of the remaining two production wells is expected to take roughly five weeks. Once drilling is completed, downhole pumps will be installed and the surface facilities will be connected, which is expected to take a further four weeks. Dewatering pumps will then be commissioned.
The dewatering process will kick off in a controlled manner, with first gas breakthrough expected within one to two months from being placed on production.
Gas at commercial rates
Talon elected to enter stage two of the farm-in agreement in early December last year and is paying the first US$3.15 million towards what is budgeted to be around US$3.5 million for the production drilling and testing program, with TMK paying its proportionate share of further costs over and above US$3.15 million.
“We are very pleased to report that the first of our three pilot production wells has been drilled safely, on time and on budget,” Talon managing director and CEO Colby Hauser said.
“Having penetrated 60 metres of gassy net coal is an outstanding result for the first well and bodes well for the remaining two wells and the subsequent production test to see if the project can deliver gas at commercial rates.”