Elixir Energy

Nomgon CBM Operations Update

Elixir Energy Limited (“Elixir” or the “Company”) is pleased to provide an operations update on the work currently underway in its 100% owned Nomgon IX Coal Bed Methane (CBM) Production Sharing Contract (PSC) in the South Gobi Basin, Mongolia.


HIGHLIGHTS

  • Nomgon-10 Pilot well drilled, completed and on line
  • CBM discovery declared at Yangir
  • Successful 2023 Drilling program near completion

The Nomgon-10 pilot production well has now been successfully drilled, completed and brought into production (with water flowing initially and gas due to follow). The time from spud to first water production was 19 days, with work proceeding on time and on budget. The well is being brought into production slowly to minimize the risks of formation damage and shocks to the coal reservoir.

Nomgon-10 is an additional pilot well that will be connected to the Nomgon Pilot Production plant. The Nomgon-8 and 9 pilot wells remain suspended whilst the Company monitors pressure communication between the wells.

Nomgon-10 Production Skid

In the Yangir region, Elixir is pleased to announce that it has performed a successful Drill Stem Test (DST) on the Yangir West-2 well. The DST over the interval 269-282 metres recorded a permeability of 2 milliDarcies (mD). The results of this well therefore constitute a CBM gas discovery under the Petroleum Resources Management System (PRMS) guidelines (Appendix 1), having proved the presence of gas saturated coal with adequate permeability.

Excelsior Energy (see company description below) conducted the DST by undertaking considerable pre-planning with Elixir and around the clock wellsite and remote supervision to ensure a successful outcome. Yangir core holes and chip holes have intersected coal thicknesses of up to 60 metres of coal, even though the full stratigraphic section is yet to be intersected. Elixir has measured gas contents of up to 10 cubic metres per ton (on a raw basis) in the Yangir sub-Basin.

At Big Slope, the Big Slope West-1 well has been successfully drilled. The well reached a total depth of 620 metres and intersected more than 27 metres of coal.

The Company’ 4 rig program is now winding down, with now one rig still drilling. The remaining Erdene Drilling rig is drilling Yangir Far West-1, and is currently at a depth of 425 metres, which is still above the coal targets.

Excelsior Energy personnel operating Drill Stem Testing tools

With Nomgon-10 on production, and CBM discoveries declared at both Big Slope and Yangir, Elixir has now met all its major drilling objectives for 2023. The drilling program for 2023 will now be finalised once the Nomgon Far West-1 well is completed. Planning for the 2024 program has commenced and will have a primary focus on de-risking the discoveries made to date.

Elixir’s Managing Director, Mr Neil Young, said: “The drilling of the Nomgon-10 pilot well has gone to plan and we look forward to growing production of water – and then gas – from this well. Favourable results will put the Nomgon Pilot Project back on the intended pathway of determining commerciality. Our other appraisal and exploration drilling in 2023 – completed safely and within budget - has added new discoveries in the key South West region of our PSC. We expect in 2024 to focus on moving these discovered resources into reserves.”


Click here for the full ASX Release

This article includes content from Elixir Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

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