Elixir Energy (ASX:EXR) - Managing Director & CEO, Neil Young
Managing Director & CEO, Neil Young
Source: Elixir Energy
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  • Elixir Energy (EXR) progresses exploration and appraisal activities at its Nomgon IX Coal Bed Methane Production Sharing Contract in Mongolia
  • EXR has flowed gas and water to surface from the Nomgon 6 well
  • The company says testing at the well has provided enough data to plan its first long-term pilot production program for 2022
  • Meanwhile, the Richcairn-2S and Richcairn-3S wells have intersected coals as planned, with a third rig spudding the Richcairn West-1S well
  • Shares are up 5.17 per cent to trade at 30.5 cents each

Elixir Energy (EXR) has updated the market on its exploration and appraisal program underway across its Nomgon IX Coal Bed Methane (CBM) Production Sharing Contract (PSC) in Mongolia.

EXR has spent recent weeks carrying out extensive testing at the Nomgon 6 well, which was drilled to a total depth of 501 metres and intersected 84 metres of coal, of which 63 metres was in the primary objective “100 series” coal.

The company said fluids flowed to surface from four separately tested zones, with the cumulative water production rate across these zones measured at 280 barrels of water per day.

The presence of gas at surface was reportedly evidenced from an uncalibrated gas-meter at the well site, which recorded methane at concentrations of up to 25,000 parts per million over a background of zero.

Extensive water samples were also obtained from the 100 series formation, with initial laboratory results indicating a brackish salinity level similar to many of the world’s producing fields.

Elixir’s managing director and CEO Neil Young said the results from Nomgon 6 were promising and had provided the company with all the necessary data to plan its first long-term pilot production program for 2022.

“This is the first time that Elixir has flowed gas to surface in a Mongolian CBM well and this early flow — and the high water flow rates — bode very well for the success of that program,” he said.

“Our team and our sub-contractors have done a fantastic job in undertaking the testing work, notwithstanding the worst that distance and COVID has thrown at us.”

Richcairn update

Meanwhile, EXR exploration drilling in the recently discovered Richcairn sub-basin has been progressing in parallel with test work at Nomgon.

The Richcairn-2S well has reached a depth of 801 metres and logged eight metres of coal and nine metres of highly carbonaceous mudstone.

Following suit, the Richcairn-3S well reportedly drilled to a depth of 800 metres. This well logged 13 metres of coal from cores and terminated in a coal section once the rig’s capacity was met.

EXR said a core hole would then be drilled at Richcairn 4 by the same rig that drilled Nomgon 6, with the rig that drilled the above thee Richcairn wells to mobilise to the Bag-1S exploration well.

A third rig was recently mobilised to the PSC area, following COVID-related delays, and has since spudded the Richcairn West-1S well.

“Our ‘rinse and repeat’ program continues to deliver with more successful exploration wells at Richcairn,” Mr Young said.

Shares were up 5.17 per cent to trade at 30.5 cents each at 10:27 am AEDT.

EXR by the numbers
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