• Gurvantes Joint Venture signs contract with Mongolian subsidiary of TSX listed Canadian drilling company, Major Drilling Group, for 3 production wells for the upcoming Pilot Well program.
• Drilling operations are forecast to commence within 90 days, with the drilling of the 3 production wells expected to take 2 months to complete.
• Reservoir modelling completed by SLB (Schlumberger), with initial modelling predicting early gas breakthrough and relatively high production rates for global CSG wells.
• Pilot Well Program primarily funded by Talon Energy pursuant to its farm-in agreement with TMK Energy.

Talon Energy today announced that the Gurvantes XXXV Joint Venture has signed a drilling contract with the Mongolian subsidiary of Canadian TSX listed drilling company, Major Drilling Group International to drill 3 Pilot Wells at the Gurvantes XXXV Coal Seam Gas Project located in southern Mongolia.

The Pilot Well program is the 2nd Stage of the planned drilling program at Gurvantes XXXV and follows on from the successful Stage 1, 7 core hole exploration drilling program undertaken in 2022, which resulted in the independent certification of a ~1.2 Tcf 2C (best estimate) Contingent Gas Resource for Gurvantes XXXV in November 2022.

The 3 Well Pilot Program will be drilled in proximity to the Snow Leopard 2 core hole, in which the test results indicated high gas content ~9.3m3 /t and coal permeability of 47 mD. TMK Energy Ltd (ASX:TMK), Operator of the Joint Venture, advises that modelling undertaken by SLB (formerly Schlumberger) has shown positive indications on both early gas breakthrough and production rates. The modelling is currently being analysed in detail by TMK and Talon but provides the Venture a high degree of confidence in achieving a successful outcome from the pilot well program.

Over an 8-week period, the production wells will be drilled and tied into the surface facilities, which include metering skids, a flare stack and water disposal facilities. The wells will be placed on pump to commence the process of pressure drawdown prior to gas breakout. Once commissioned, the pilot wells will be operated for approximately six months in order to understand the water and gas production profiles of each well. The Venture is also undertaking work to determine the economics of either the JV using gas brought to surface in its operations, or in power generation for nearby mining operations, rather than flaring the gas.

In addition to the pilot well program, the JV is planning to drill a further 8 exploration wells to further expand the current Resource estimate within the permit. Importantly, 7 of the 8 planned wells will be drilled outside of the Nariin Sukhait area, the location of the Stage 1 drilling program.

In December 2022, Talon exercised an option to take a 33% interest in the Production Sharing Agreement over the Gurvantes XXXV Project, and entered into a Joint Venture with ASX Listed energy company TMK Energy Limited, who hold the balance of the interest (67%) and is Operator of the Gurvantes JV.

Talon’s Managing Director & CEO, Colby Hauser, commented: 
“Following on from an excellent initial exploration campaign that yielded a 1.2 Tcf 2C Contingent Resource (gross), we are pleased to formally kick off the next stage of appraisal, in the drilling and completion of a 3 well pilot program. Having observed high gas content and excellent permeability in the coals we are confident in producing gas to surface and proving the commercial viability of the project.”

Gurvantes XXXV PSA

The Gurvantes XXXV PSA covers a significant area of 8,400km² and is in, what is considered one of the most prospective coal seam gas basins globally. Gurvantes XXXV is situated less than 20km from the Chinese-Mongolian border and close to the extensive Northern China gas transmission and distribution network. It is also proximate to several large-scale mining operations with high energy needs. Gurvantes is therefore ideally placed for future gas sales to satisfy both local Mongolian, as well as Chinese, energy requirements.

Exploration activities at Gurvantes XXXV commenced in Q1 of 2022, with the drilling of 5 fully tested cored holes within the western portion of the Gurvantes XXXV Project area, located in the region of Nariin Sukhait. Narrin Sukhait has a number of active open cut coal mining operations and has been extensively explored for coal over the last 15 years. The area is known to contain two very thick, high quality, coal seam groups, and preliminary coal seam gas data acquired from the series of 5 wells indicates high gas contents.

KeyFacts Energy: Talon Energy Mongolia country profile