Talon Energy Ltd (ASX:TPD)’s partner TMK Energy has revealed that all three pilot wells are performing in line with expectations at the Gurvantes XXXV CSG Project area in the South Gobi Basin of Mongolia, where Talon hold’s 33% share.
During pump replacement Lucky Fox-3, well interference testing indicated good communication between production wells, a further positive indication of good permeability.
Moving forward, the company has kicked off a joint exploration program in a cost-sharing arrangement with Terra Energy in the eastern part of the project area.
Running seamlessly
TMK energy CEO Brendan Stats said: “The production wells have been running seamlessly since the start of the production testing some six weeks ago.
“When the pump at Lucky Fox-3 required replacement, this provided us with the opportunity to gather additional data on interference testing between the three production wells and it proved connectivity between the wells which is another positive indication of permeability.
“The speed and efficiency of the TMK team together with the drilling contractor (Major Drilling) to mobilise equipment, replace the pump and get the production wells back up and running shows the rapidly maturing operational capability of TMK’s organisation.
“We look forward to continuing to gather data from the production wells, whilst at the same time commencing another significant exploration program in the east of the concession that could add a second string to our bow and potentially add further resources to the already significant Contingent Resources the Company has discovered in the Nariin Sukhait area.”
Pilot well program
All three pilot wells have been performing well since they were commissioned in mid-July, with good water production rates.
Water production rates have increased over the first six weeks of the production testing, up to a maximum rate of approximately 630 barrels of water per day.
Gas was produced to surface very early in the testing period and has been sufficient to maintain continuous flaring of the gas at each of the wellheads.
Joint exploration program
TMK has kicked off a joint exploration program with Terra Energy which includes a minimum of four fully cored exploration wells and around 40 kilometres of 2D seismic acquisition in the Gurvantes XXXV Project area.
The exploration drilling program recently began utilising two drill rigs from contractors already engaged by Terra.
The 2D seismic acquisition is due to commence in mid-September.
The company will continue to update Shareholders on any material results as the exploration drilling program progresses.
About Gurvantes XXXV
The Gurvantes XXXV Project (TMK Energy 67%, Talon Energy 33%) covers an area of 8,400 square kilometres and is in what is considered one of the most prospective coal seam gas basins globally.
The project is situated less than 20 kilometres from the Chinese-Mongolian border and close to the extensive Northern China gas transmission and distribution network.
It is also proximate to several large-scale mining operations with high energy needs.
Gurvantes is therefore ideally placed to satisfy both local Mongolian, as well as Chinese, energy requirements.