Perth-based Elixir Energy announced that it has now signed a binding drilling services contract with Mongolian company Erdenedrilling LLC (Erdene). The contract enables Elixir to drill two fully tested coal-bed methane (CBM) core-holes with the option for another well. The Company estimates the first well will be spudded in or around late September/early October. These will be the first CBM wells in Mongolia to be tested to international best practice gas industry standards. Erdenedrilling has sub-contracted Arizona based Coal Gas Technology Co (CGT) to supply equipment and technical services in connection with gas content testing. CGT has more than 30 years of experience in providing such services to the CBM industry – across North America, Australia, China and other countries. Elixir will directly source permeability testing services from Australia. Elixir’s Managing Director, Mr Neil Young, said “Our upcoming core-hole program is on track to supply us with the key data we need to start to convert part of the massive prospective resources independently confirmed in our PSC into contingent resources. Quite simply, we aim to book Mongolia’s first gas discovery within less than six months.”
In October 2017, Elixir executed an option to acquire Golden Horde Limited (GOH) who, in 2011 secured CBM rights Coal Seam Gas or CSG) in Mongolia in an area adjacent to the existing gas markets of Northern China.
The PSC is located in what is considered to be one of the most prospective basins in Mongolia for CBM. The PSC surrounds one of the world’s largest producing thermal coal deposits, Tavan Tolgoi, which has an estimated resource of over 6 billion tonnes and produced over 14 million tonnes of coal in 2016. Data from wells within the Tavan Tolgoi mine indicate gas contents of up to 15m3/tonne (480 cf/ton) at depths of 467 metres below surface which is considered high by world CBM standards and is a good indication that surrounding areas are likely to contain similar gas content levels.
(Source: Elixir Petroleun – Image: CBM drilling rig in southern Mongolia/Erdenne Drilling)