Elixir Energy Limited released an operational update on the extended pilot project (Nomgon Pilot Project) in the Nomgon IX CBM Production Sharing Contract (PSC) in Mongolia’s South Gobi Basin.
According to Elixir, given the results obtained thus far, its Board is optimistic that the Project is on the route to commercialisation and has agreed to expand the Pilot Project through an extension of the flow period and the drilling of an additional pilot well.
Elixir believes that the economic viability of CBM in Mongolia offers major benefits over Australia, owing to significantly cheaper drilling costs and access to gas prices that reflect the East Asian region’s status as an LNG importer rather than an exporter.
In early April 2023, the company completed the workover of the two well Pilot Project in Nomgon IX. The previous completions have to be removed, cleaned, and rebuilt. Smaller pumps, more suited to real water flow rates, were installed. The pumps and related gauges were installed deeper in the wellbore to allow fluid levels to be reduced to below the coal seam level.
The Nomgon-9 well has been successfully restarted, with different tests being carried out to manage rates (which have varied up to 76,000 standard cubic feet per day) while monitoring the well’s back pressure and fluid (water) level.
Water flow rates have remained consistent in recent weeks at 105 barrels of water per day, indicating that increasing desorbed gas flows will emerge in the future.
The diverse patterns of fluid (gas and water) flows from the Pilot are frequent in CBM projects across the world, according to the Directors of Elixir’s multi-decade CBM experience.
The Nomgon 8-well is now turned off and serves primarily as a monitoring well for measuring interference pressure.
A new Pilot Well (Nomgon-10) is presently being prepared to supplement the data collection gathered from the Nomgon Pilot Project. Elixir is now assessing the best drilling contractor for this well in light of its other drilling plans for 2023.
Elixir’s 2023 exploratory drilling cycle is set to begin soon. Top Diamond Drilling LLC, which is owned and operated by Mongolians, was awarded the Company’s 5 well exploration program.
The 2023 exploration drilling program will begin after certain regulatory formalities have been completed. The Company’s 2023 appraisal program’s official regulatory procedure for the preferred tenderer is likewise nearing its conclusion.
“We are pleased to announce an expansion of the Nomgon Pilot Project. Our strategy to invest in Mongolian CBM rests on the strong regional combination of high gas prices and low costs and the results to date are highly encouraging in this context,” Elixir Managing Director Neil Young said.
