EXR: Positive update on CBM pilot production

Our energy Investment Elixir Energy (ASX:EXR) has provided an operational update on the pilot production testing at its coal bed methane project in Mongolia as the project enters the final data gathering and fine-tuning phase.

As previously announced, pilot production from the Nomgon-8 and 9 wells passed the key milestone of flowing 200,000 standard cubic feet per day (scfpd) of gas for the first time earlier this month.

Following that achievement, EXR has again shut-in the two wells to record downhole pressure buildups. So far there are indications of good reservoir pressure support at the Nomgon-9 well.

Here is the major rig setting up for routine workover operations at the Nomgon-8 well:

After the shut-in period, EXR will workover both wells with a view to improving production efficiency — specifically it will remove and replace all gauges in the two wells, clean and wash all cuttings and material from the wellbore, change and lower downhole pumps, and recalibrate all surface equipment.

All of these activities are routine given the harsh winter environment the wells are operating in, and should be completed within 10 days for both wells.

From there, EXR plans to continue the extended production test for “around another couple of months” to maximise the data gathering aim of the pilot.

As for EXR’s 2023 exploration drilling program, the company says that the standard government mandated tendering process is almost complete. Once finalised this should lead to the award of tenders and the initiation of the drilling program for 2023.

Today’s announcement follows Managing Director Neil Young presenting to the Brisbane Mining Investor Conference on Wednesday.

While there doesn’t appear to be a recording of his presentation available, the presentation slides can be found here.