With shares trading at an eight-year peak and aiming higher, Elixir Energy has provided an update on its largest exploration program to date in Mongolia.
The Adelaide-headquartered explorer launched the exploration and appraisal program across its 100%-owned Nomgon IX CBM PSC, where the spudding of two exploration wells is imminent.
The first well in the 2021 drilling program, Yangir-2, has just been finished and the Yangir depocenter has proven to be highly fractured and hosting of gaseous rocks, which is encouraging for permeability and gas content respectively, but has made for more complex drilling operations.
The desorbed gas was chromatographically analysed and contained 99% natural gas (i.e. methane). Elixir said this gas composition is essentially of sales gas specification, which means no additional processing would be required to sell it into a third-party pipeline.
The well reached a total depth of 578 metres and in the first 300 metres logged 17 metres of coal (logging beyond 300 metres was not feasible due to hole conditions).
Nine coal samples from 288 to 301 metres were placed in the desorption laboratory and these recorded raw gas contents ranging from 4.2 to 7.0 m3/tonne (average 5.3m3/tonne). Dry Ash Free
(DAF) figures will be reported in due course once laboratory tests are finalized. Elixir said these raw gas figures were similar to those measured in the Nomgon sub-basin. Three Injectivity Fall Off Tests (IFOT) were conducted in the well, however, because of the highly fractured nature of the coal and surrounding lithologies, no interpretations were possible. Very high fracture permeability was inferred from this, but not proven.
Analysis of the results of Yangir 2 will be completed before planning the next appraisal steps in what appears to be a highly gaseous but structurally complex depocentre.
The ErdeneDrilling LLC rig which drilled Yangir-2 now moves some 60 kilometres to the East to the Temee 1S well, where the target is coals interpreted from previously recorded/interpreted 2D seismic amplitudes.
Another drilling rig, from a second Mongolian drilling contractor called Top Diamond Drilling LLC, will move to the Cracker-1S well location in the next few weeks, targeting another new depocenter in the North-West of the PSC.
The company’s 2021 2D Seismic Program has also just commenced. It comprises 220km of 2D seismic – the largest Elixir has undertaken to date. Multiple depocentres are targeted, both new and as follow-ons to the seismic work in previous years.
Elixir said ongoing community transmission of COVID-19 in Mongolia was currently being addressed by the Government through various measures such as lock-downs and strong border controls.
“To date, Elixir and its sub-contractors have been working closely with various levels of Government to seek to work within these rules whilst still vigorously prosecuting its field program.
“A suite of measures, including vaccinations for staff and contractors, strong isolation procedures in the field and full compliance with all Government directions, has been adopted. Although the future course of the pandemic is uncertain, Elixir and its contractors have built maximum resilience to deal with the issues that might arise,” the company said.