Elixir on track to launch gas pilot production test before end of year at Nomgon IX CBM project

Wed 12 Oct 22, 12:41pm (AEST)
Traditional yurts set up on Mongolian grassland
Source: Unsplash

Key Points

  • Elixir Energy’s drilling team has completed the Nomgon-8 and Nomgon-9 wells that comprise the company’s pilot production well
  • Drill rig remains on site ahead of expected pilot production test launch in mid-late November
  • The company notes winter has hit the South Gobi Mongolian desert early with light snowfall accumulating; slight delays expected

Elixir Energy (ASX:EXR) has finished first-stage drilling of the two wells which will comprise a pilot gas well production program at the company’s Mongolian coal bed methane (CBM) gas project, called Nomgon IX. 

The drill rig tasked with the drill run remains on-site to conduct completion works on both wells ahead of the company’s flagship pilot well production test on the not-too-distant horizon. 

Elixir is on track to commence gasflow production testing on-site in mid-late November.

Winter coming early to Gobi

The company has today advised shareholders to note winter storm season has hit the South Gobi early, and a light dusting of snow is currently accumulating on the desert floor. 

Elixir expects some brief delays to be incurred due to weather conditions, but not enough to throw off the mid-late November target. 

Since it chose new drilling contractors, Elixir has been enjoying an increased pace of speed at Nomgon IX. Major drilling (the name of the company) finalised the Nomgon-8 well in only 10 days. 

Nomgon-8 intersected 50m of gassy coal underground, a promising sign of commercial prospectivity ahead of next month’s production test. 

New target field on the radar 

While Elixir progresses towards the launch of its production test, the company is also exploring the Big Slope 2 target, another area of interest within the Nomgon IX project’s mammoth boundaries. 

Drilling at Big Slope 2 hit a 38m thick gassy coal seam, with gas desorption readings the highest ever logged at Nomgon so far. 

Elixir notes it will continue to “appraise this coal discovery” into early 2023. 

However, company interest in Big Slope 2 is clear: Elixir will move ahead to an Injection-Fall Off Test (IFOT) before the end of 2022, a preliminary operation which allows operators to gauge reservoir pressure and get an early idea of permeability underground. 

Everything to plan: Management 

“Our CBM pilot production continues to go to plan with the completion of the two pilot wells on time and on budget,” Elixir Energy MD Neil Young said. 

“Our aim remains to pump water, then gas, from the wells in the short term.” 

“In parallel, the recent exploration-appraisal results from the Big Slope field are promising and we will continue to expand our knowledge of this area.” 

Elixir's six month charts demonstrate the company's share price bouncing back from the June-July 2022 sell-off season
Elixir's six month charts demonstrate the company's share price bouncing back from the June-July 2022 sell-off season
Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Elixir Energy was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.


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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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