Elixir Energy Ltd (ASX:EXR) continues to make headway on its coal bed methane (CBM) exploration and appraisal program underway at the wholly-owned Nomgon IX CBM Production Sharing Contract (PSC) in Mongolia.
The energy stock recently finished drilling the Bulag-Suuj-1S exploration well, which logged 21 metres of coal.
This discovery has since opened up a potential new CBM-bearing sub-basin in the PSC area and Elixir is advancing a new appraisal well — known as Bulag-Suuj-2S — to follow up on the finding some 4 kilometres away.
In the meantime, drilling contractor Top Diamond Drilling has moved a second rig to the site and is now spudding the Venetian-1S exploration well.
Other activity
Elixir has also closed the books on its 2022 2D seismic acquisition program — the campaign concluded on time and within budget and picked up 322 kilometres of data.
Now, that information is being processed and interpreted to help guide the explorer’s future drill programs.
Further out, Elixir’s Yangir-4 well has faced some drilling difficulties related to fractured coal and is being re-drilled.
Taking a look at the bigger picture, the company’s extended pilot production program is advancing in parallel to the exploration and appraisal drilling.
Experienced Mongolian contractor Monbag has been hired to construct the civil works and this will kick off shortly.
Drilling sub-contractor Major Drilling expects to spud the first of two production wells by the end of August.
Outside its operation and exploration endeavours, Elixir has opened a tree plantation in the small Gobi town of Nomgon.
It comes as the Mongolian Government strongly supports tree planting efforts as part of a broad program to fight desertification and mitigate carbon emissions.
Moving into top gear
Elixir managing director Neil Young said: “As we move to the middle of the Mongolia summer, our operations efforts are moving into top gear.
“We now have three rigs working in our PSC, pursuing a range of exploration and appraisal targets.
“A fourth rig will join the program shortly as we move to start up our extended pilot production test.
“In parallel, our Gobi H2 project – recently materially boosted by the execution of a memorandum of understanding with Japan’s SB Energy – is hiring a fifth rig to undertake water exploration drilling over the coming months.”