Elixir finishes on strong note, but wait, there’s more ...
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Elixir Energy Limited (ASX:EXR) has provided a promising update in relation to its 100% owned Nomgon IX CBM PSC in Mongolia.
Management has been awaiting critical information regarding adsorption results from the Nomgon 2 core-hole well.
COVID-related issues have caused some delay as the laboratory results are being processed in Beijing, but the news was worth waiting for as it demonstrated that the lower 100 series coals at Nomgon-2 are fully gas saturated.
This is consistent with the Nomgon-1 well, representing a best-case scenario as it will greatly reduce the costs and other issues associated with water handling in future testing and production phases.
Proof of consistently strong adsorption results will positively impact the company’s production testing in 2021.
Elixir provides exposure to China’s five-year energy plan
With its extensive PSC landholding providing ready access to high demand markets in China, Elixir represents a compelling investment play for Australian investors in that it is one of only a few ASX- listed companies that offers exposure to the globally significant thematic of a de-carbonising and increasingly energy security-conscious China.
China’s new “5 year plan” dramatically reduces its reliance on other global powers for key resources, especially its energy supply with the added advantage of transitioning from burning dirty coal for energy.
Commenting on recent developments, Elixir’s managing director Neil Young said, "The consistent adsorption result from Nomgon-2 indicates that the earlier high gas saturation levels from Nomgon-1 were not a one-off and this is already feeding into our production testing plans for next year.
"COVID has been a universal factor for all of us in 2020 and although Elixir (and Mongolia) has generally been impacted much less than others, shutting in our operations for a month or so in the midst of the Mongolian winter is ultimately a prudent move.
"All 7 wells drilled this year intersected coal and we are already advancing the processes and plans required to hit the ground running in the New Year.
"Our planned technical program for 2021 will greatly expand upon 2020’s excellent work.”
The company’s outstanding progress has been reflected in its share price, up six-fold since January with the potential for further upside in 2021 given multiple catalysts are on the horizon.
Elixir now focused on 2021 production testing and exploration program
With the Mongolian winter now upon it, Elixir’s shut down of its operations over the next few months has proven to be fairly timely as some COVID restrictions have recently been applied due to community transmission.
However, Mongolia has been one of the lucky countries in that broader region with little interruption from COVID, and apart from some inconveniences in recent weeks, it has been business as usual for Elixir.
However, management isn’t taking any risks as it looks towards 2021.
In order to effectively manage health issues, as well as supporting the local community, Elixir has purchased 30,000 masks and 600 bottles of hand sanitiser for donation to the local authorities in the region of its PSC.
Elixir anticipates commencing its 2021 program in or around February with the drilling of a fully tested core-hole to follow up on the highly promising Yangir 1S strat-hole.
Some gas samples were obtained from the bubbling cores extracted in the Yangir well and these will be tested for gas composition shortly (gas content cannot be accurately measured given the absence of an on-site laboratory for what was only a low-cost strat-hole).
Management has recently submitted its formal budget and plan for 2021 to the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) as part of an annual regulatory process required under the terms of the Nomgon IX PSC, which will also involve procuring subsequent environmental approvals from the relevant Ministry.
tagsPRODUCTION TESTING EXPOSURE TO CHINA NOMGON IX CBM PSC IN MONGOLIA FULLY SATURATED COALS OIL AND GAS EXPLORATION
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