Talon Energy Ltd (ASX:TPD) welcomes farm-in partner TMK Energy Limited executing a contract with the Mongolian operating subsidiary of Major Drilling Group – a large international Canadian-based drilling company – for a maiden pilot well program at Gurvantes XXXV Coal Seam Gas (CSG) Project joint venture.
The deal means Major Drilling Group will drill and complete three production wells for the program at the Gurvantes Project, in close proximity to the successful Snow Leopard-02 exploration well.
Drilling is expected to commence in April, after completion of site works and import of long lead items which have been ordered and are in transit to southern Mongolia.
The results from SL-02 have been integrated into modelling work undertaken by SLB (previously named Schlumberger) which has shown positive indications on both early gas breakthrough and production rates compared to CSG wells globally.
Modelling “highly encouraging”
This modelling work is being analysed in detail but the company says it is highly encouraging and provides a high degree of confidence that the pilot well program will be successful in delivering a 'proof of concept' and a gas flow to surface at what are modelled to be relatively high production rates.
The pilot program is expected to take about eight weeks to complete the drilling of the three production wells and installation of pumps.
Production wells will then be tied into the surface facilities, which includes metering skids, a flare stack and water disposal facilities, and then placed on pump to commence the process of pressure drawdown prior to gas breakout.
Once commissioned, the pilot wells will be operated for around six months in order to understand the water and gas production profiles.
Work is underway to determine if there is an economical and environmentally sensible way to use the gas produced to surface during the early stages of the production test rather than flaring the gas.
Talon farm-in
Following the election of Talon Energy to proceed with Stage 2 of the farm-in agreement in December 2022, the pilot well program will be primarily funded by Talon.
The total cost of this program is expected to be about US$3.5 million, of which the first US$3.15 million is paid by Talon and the balance is split 67–33 according to TMK and Talon’s interest in the project.
Talon’s managing director & CEO Colby Hauser said: “Following on from an excellent initial exploration campaign that yielded a 1.2 Tcf 2C Contingent Resource (gross), we are pleased to formally kick off the next stage of appraisal, in the drilling and completion of a three well pilot program.
"Having observed high gas content and excellent permeability in the coals we are confident in producing gas to surface and proving the commercial viability of the project.”