Talon Energy: The production facilities for the Pilot Well Programme have been fully commissioned. After the reservoir has been depressurized for the first time, gas breakthrough can begin at any time. At slow but steady rates, all three pilot wells are effectively bringing water to the surface. Funding for Talon’s Stage 2 was successfully completed.
The following is an update regarding the Pilot Well Programme at the Gurvantes XXXV CSG Project (Talon 33%, TMK 67%) in the South Gobi Basin of Mongolia from Talon Energy Ltd (ASX: TPD). Operator of the Gurvantes XXXV Coal Seam Gas Project and Company Joint Venture partner TMK has informed the Company that testing of the Pilot Well Programme has begun.
The initial three wells of the Pilot Well Programme have been drilled to completion, surface facilities have been installed and commissioned, and the more extended stage of production has begun.
Talon Energy stated, as a result of funding the initial US$3.15 million in expenditures for the Pilot Well Programme, Talon has fulfilled its Stage 2 funding requirement under the Gurvantes XXXV Farm out Agreements. In the future, Talon Energy and TMK will pay their respective shares (33% and 67%, respectively) of all future expenses.
The three wells have begun pumping water at modest speeds into surrounding storage ponds, where it will be recycled by local mining operations since the last update on July 13, 2023. Since early water rates are a good indicator of permeability, the present rates being achieved at low pump speeds are satisfactory.
The reservoir’s pressure will be lowered over the next few weeks as the pump speeds are increased progressively. Early modelling implies that some gas breakthrough may occur at any time after the initial depressurisation of the reservoir, even if initial gas penetration isn’t expected initially.
Talon Energy went on to say that in the early stages of gas breakthrough/production, gas will be flared at the surface, and data on gas and water production will be evaluated to offer vital information for future commercialisation and allow pre-feasibility studies to get underway. Once stable output is attained, the option of using the Lucky Fox production wells to generate energy for both internal consumption and possible sales revenue can be considered.
As the production test progresses, the wells are expected to begin flowing at lower rates of methane gas and higher rates of water.
Commenting on the matter, Mr. Colby Hauser, Managing Director and Chief Executive Officer of Talon, said:
We are pleased to announce an important milestone in the development of the Gurvantes XXXV Coal Seam Gas (CSG) Project with the commencement of production testing.
Over the last 18 months, we have seen the project progress from the drilling of the first CSG exploration wells, to discovery of a significant gas Resource, and now commencement of production testing from the Pilot Well Program. Thank you to our partner TMK Energy and our contractors for getting us to this milestone. We look forward to a positive result from the extended production test.
