Holy frack: Elixir Energy’s Mongolian pilot plant just hit 100,000 cubic feet per day

Mongolia-based smallcap Elixir Energy (ASX: EXR) has seen its pilot gas plant facility at the Nomgon IX CBM project in the Gobi Desert hit a production rate of 100,000scfpd, the company revealed on Tuesday. 

The move represents a production milestone for the company, which was the first ASX smallcap to produce gas in the south Mongolia region. 

Fun fact: The company’s mammoth acreage is roughly the size of Belgium.

Gas flows on the rise

Gas flows at the pilot facility have been steadily increasing, with rates at 80,000scfpd to 100,000scfpd last week. CBM ‘fracking’ wells typically return a cut of water to the surface as part of normal well behaviour. 

“The high gas saturation levels in the coals means minimal water production and very early gas breakthrough – both of which support long term economics,” Elixir chief Neil Young said. 

Typically, newly spud fracking wells will turn up decreasing amounts of water as coal bodies underground slowly de-water. The less water that is returned, the more gas is produced. 

Water production at the pilot is stable at 180bpd, indicating pressure dynamics are well understood and manageable by the operational team.

Australian comparison 

“This water production level (producing water is generally a standard feature of CBM operations) is very low compared to most Australian producing areas,” the company wrote on Monday. 

“Additionally, the water salinity appears to have stabilised at less than 5,000 ppm Total Dissolved Solids (TDS), which is at a level which may be suitable for livestock to drink,” the company said.

Nomgon-9 the star of the pilot 

As for now, the well is currently shut for pressure testing before production will re-commence. 

The pilot plant is comprised of two wells: Nomgon-8 and Nomgon-9. Elixir notes that Nomgon-8 production, the smaller producer of the two assets, is now producing an increased volume of gas  after a well workover was completed. 

Nomgon-9, the flagship asset, produced roughly 80,000scfpd of gas last week.

Elixir's three month charts

Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Elixir 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.