Australian-Mongolian pioneer gets back to work at Nomgon field

AUSTRALIAN-headquartered Elixir Energy will be back in its Mongolian coal seam gas field from next month, despite the coronavirus pandemic which has seen Mongolia implement strong border controls.
Australian-Mongolian pioneer gets back to work at Nomgon field Australian-Mongolian pioneer gets back to work at Nomgon field Australian-Mongolian pioneer gets back to work at Nomgon field Australian-Mongolian pioneer gets back to work at Nomgon field Australian-Mongolian pioneer gets back to work at Nomgon field

Paul Hunt

Senior Journalist: Oil & Gas, Policy.

Paul Hunt

Mongolia has one of the smallest rates of infection worldwide, with the majority of new cases over the last month imported from abroad. There have been zero reported deaths due to coronavirus thus far. 

This has ASX-listed Elixir confident its team will be able to return to the Nomgon IX field to continue exploration and appraisal. 

The company said it was in a "rare position to actively explore" given the pandemic and credited the Mongolian government's tough border controls for allowing its upcoming drilling project to go ahead. 

Elixir recently finished mapping its Nomgon permit and has largely completed analysis. The next phase of appraisal will involve drilling one core-hole and three strat-holes. 

It also plans to acquire a further 106-kilometers of 2D seismic, which should optimise another well program in the coming months. 

Exploration and appraisal aside, Elixir also plans to begin development of a small-scale LNG plant this year, after signing an offtake agreement with a major fuel retailer for gas from its already discovered reserves. 

Elixir made its first gas discovery in its 7 million-acre Nomgon IX PSC in the South Gobi Desert in early February, when it drilled a well that encountered 82 meters of net coal.

 Just a fortnight ago, the company inked a supply agreement with MT Group to supply LNG fuel for MT's large trucking fleet in South Gobi. 

The fleet carries more than 15 million tonnes of coal from Mongolia's Tavan Tolgoi to China, and currently operates on diesel, but will be replaced by gas-fuelled vehicles

It has been nearly two years since Elixir was granted a production sharing contract for its Nomgon XI project. 

The PSC is located primate to the Chinese border, meaning gas produced from the CSG project can be used for domestic markets and markets in Northern China. 

Today Elixir also reiterated plans to farm-out an interest in its 30,000-sq.km PSC area. The company did not say whether or not it was already in discussions with potential joint venture partners. 

Elixir shares had jumped 12% by noon, trading at 3.8 cents per share. The company has a market cap of $23.4 million. 

 

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