Energy: Elixir shares double after hitting the jackpot with a 51m thick coal seam in Mongolia
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Mongolia-focused Elixir Energy (ASX:EXR) surged as high as 116 per cent this morning following an operations update.
Elixir is drilling for coal seam gas (CSG) at its Nomgon project. CSG is an unconventional type of natural gas in coal deposits.
Drilling at Elixir’s Nomgon-1 well intersected 82m of net coal and the thickest coal seam was 51m.
The company wants to find thick coal seams below 300m and it says it has now met that goal with the results to date. While 63m of the 82m is at a depth below 300m, it is above 491m where the well has now reached.
Elixir also reported that the coals were visibly fractured and cleated, which means extraction would be easier.
“We are very excited with the results to date from the Nomgon-1 well, which has met our key strategic objective of intersecting very thick and visually good quality coals within the CSG depth window,” managing director Neil Young said.
The success came just a few weeks after results from another one of its wells, Ugtaal-1, left shareholders disappointed.
Elixir shares have lagged in the past few months and fell 45 per cent in the second week of January. But they climbed as high as 116 per cent in early trading.
AJ Lucas (ASX:AJL) now owns 93 per cent of Cuadrilla Resources, the operator of the Lancashire gas well. AJ Lucas previously owned 47.6 per cent but bought a stake held by private equity firm Riverstone.
In a statement this morning AJ Lucas said Riverstone could no longer wait for the UK moratorium on fracking to be lifted. AJ Lucas expects the moratorium will eventually be lifted and said taking a greater stake in the project would also simplify decision making.