LNG

Elixir Energy Ltd, the Australian exploration and production company with coal-seam gas interests in the Gobi Basin of Mongolia, is also making progress with assets in the Australian state of Queensland where it signed a data-sharing agreement with LNG operator Santos for the Bowen Basin.

“The company has entered a data-sharing agreement with oil and gas giant Santos covering planned wells in neighbouring permits in the Taroom Trough of Queensland’s Bowen Basin,” said Elixir.

Elixir’s agreement with a Santos group company is in connection with Elixir’s 100-percent-owned Grandis Gas Project for petroleum lease ATP 2044 located in the basin.

“It provides for Elixir and Santos to exchange technical data on planned wells in the neighbouring ATP 2044 (Elixir) and ATP 2056 (Santos) exploration permits in the Taroom Trough,” a statement added.

The Elixir-Santos agreement also provides a mechanism to establish a forum for technical discussions about the deep plays in the Taroom Trough.

LNG operations

Adelaide-based Santos is the operator of the Gladstone coal-seam-gas-to-LNG plant in Queensland and runs the Darwin LNG facility in the Northern Territory. It is also a significant shareholder in Papua New Guinea LNG and the expansion project.

“We are naturally very pleased to enter into this agreement with a company of the size and quality of Santos, who is a neighbour on multiple sides of our Grandis Project,” explained Elixir’s Managing Director Neil Young.

“The enormous potential of the known and extensive gas resources in the Taroom Trough will have a greater chance of being realized through such cooperative efforts. We look forward to working with Santos in the years ahead to develop this play,” Young stated.

Elixir recently provided an update on its activities in its 100-percent owned Nomgon IX coal-seam gas production sharing contract in the South Gobi Basin of Mongolia.

“Recent coring, desorption and testing at the Big Slope coal deposits have formally yielded a gas discovery under Petroleum Resources Management System (PRMS) guidelines, having proved the presence of gas saturated coal with adequate permeability,” said Elixir.

The company said a total of 3,510 metres has now been drilled in the Big Slope area with a total of 259 metres of coal intersected.

“Elixir has measured consistent gas contents of up to 9 cubic metres per ton (on a raw gas basis) - with the expected strong correlation of increasing gas content with depth,” it added.

The company noted that the well completed most recently, Big Slope Shallow-1, intersected 37 metres of coal in a well that was 321 metres deep.

Shares purchase

Elixir, which has offices in Adelaide and in Ulaan Bataar in Mongolia, has also just launched a share purchase plan (SPP) to raise up to A$3.5 million (US$2.24M) on the same terms as a recently announced share placement.

“The board is pleased to offer existing eligible shareholders an opportunity to participate in this SPP,” said the company.

“The SPP will give all eligible shareholders an opportunity to apply for up to $30,000 worth of new shares at an issue price of A$0.07 cents per SPP share,” it added.

“For each two new shares acquired, the company will issue one free attaching listed option, exercisable at 12 cents and with a term of three years, (SPP Options),” Elixir explained.

The SPP is intended to raise A$3.5M with an ability to take an additional A$2M at the board’s discretion.

Elixir Energy Ltd, the Australian-listed exploration and production company, has provided an update on the extended pilot production project underway in its 100-percent owned Nomgon coalbed methane (CBM) production sharing contract in the South Gobi Basin of south Mongolia near the Chinese border.

Elixir said that the Bluebill-1S exploration well has been the first drilled in the 2023 exploration drilling campaign.

The well is situated 18 kilometres (11 miles) East of the Nomgon Pilot Production Plant.

“Operations at the Nomgon extended pilot test continue. Water flow-rates at Nomgon remain steady at 130 barrels per day,” Elixir explained in its report filed with the Australian Securities Exchange.

“Gas flow rates are currently variable as we experiment with choke size, casing pressure and fluid level to optimise coal depressurisation,” added Adelaide-based Elixir.

“A location for an additional pilot well has been identified and the relevant environmental and other approvals are being pursued,” it said.

The company also owns gas assets in Queensland which pioneered LNG production from CBM, known in Australia as coal-seam gas (CSG).

Fuel potential

Analysts note that the Elixir project could at some stage add small-scale liquefaction for future production of LNG fuel with a nearby customer base of a major road for fleets of heavy-duty trucks delivering Mongolian coal to China.

“The appraisal drilling campaign planned at Big Slope and Yangir is due to commence shortly, with both Major Drilling and Erdenes Drilling assisting Elixir in this program,” Elixir said.

“The company’s previously announced nine-well CBM drilling campaign for 2023 and accordingly remains on track,” it added.

“At Elixir’s direction, drilling contractors have significantly improved their drilling capability for the 2023 program, with all rigs now incorporating enclosed mud systems which should assist in increasing penetration rates and stabilising the holes,” Elixir stated.

Elixir’s Managing Director, Neil Young, said he was pleased to commence the exploration drilling campaign in what are now “excellent” weather conditions and appraisal drilling would also start soon.

“Later this year we aim to also see the company’s operations add drilling in Australia for the first time. We are very much looking forward to the multiple sources of potentially very positive news flowing from all of these activities,” stated Young.

Elixir also has contingent resources booked in the Grandis Gas Project in Queensland.

Elixir Energy Ltd, the Australian-listed exploration and production company, has provide an update on the extended pilot production project underway in its 100-percent owned Nomgon coalbed methane (CBM) production sharing contract in the South Gobi Basin of south Mongolia near the Chinese border.