Talon strikes breakthrough deal for green energy production in Cooper Basin

Talon Energy has executed a game changing deal that could place it at the forefront of not only emissions reduction, but also hydrogen production and enhanced gas recovery from its own, and potentially other coal seam gas projects.

Talon Energy (ASX:TPD) is acquiring a 60% stake in GreenFlame Energy, which holds an exclusive patent licence for the application of Applied Vapor Solutions’ (AVS) zero emissions Superheated Steam Technology process.

As part of the deal, the company will pick up Strike Energy’s (ASX:STX) Jaws project in the South Australian Cooper Basin, for a “nominal fee”, which has had millions invested on infrastructure, including multiple wells already drilled and completed.

Importantly, this gives the company a strong head start in terms of time savings and capital.

AVS’ Superheated Steam Technology process simultaneously enhances recovery of hydrocarbons (methane) from coal seams while sequestering CO2 and producing hydrogen.

With up to 135m of coal, and some of Australia’s thickest coal seams, Strike’s Jaws project has been identified as an ideal trial candidate for both CO2 sequestration and enhanced coal seam gas production, as well as having the potential for zero emissions electricity generation.

“The transaction with AVS and GreenFlame is an important step for Talon and the industry in general,” managing director David Casey said.

“Increasingly, our industry is seeing the requirement from governments, regulators, and investors, to demonstrate the ability to work towards a low emission energy future. Talon is cognisant of these requirements and takes its position as a player in the energy transition seriously.”

This is an industry first, with no other energy player yet having thought of sequestering CO2 into coal seams, let alone using it to stimulate gas production.

Coal seams hold several times the amount of C02 versus sandstone reservoirs, which has been the conventional thinking until now.

Because this Superheated Steam Technology can substantially increase coal rank on contact by pyrolysis, it essentially does in seconds what takes nature and the Earth’s geological coalification processes millions of years to do, Talon says.

The technology also has the potential to significantly enhance both CO2 storage (sequestration) and methane production from coal seams.

Sequestering CO2 at supercritical temperatures also significantly enhances coal seam permeability and methane production, even from low rank, low gas content and undersaturated coals.

The process actually generates methane and increases CO2 storage to where pyrolysed coals can hold over 100x more CO2 than conventional sandstone reservoirs.

“Thanks to the considerable existing infrastructure on PEL96, we are confident that the initial pilot appraisal and application of GreenFlame’s licensed compact Superheated Steam Technology can be conducted on an extremely cost-effective and timely basis,” Casey explained.

“It is not often that an opportunity presents itself where a potential groundbreaking technology can be so readily applied to an existing asset. If proven successful, this transaction will place Talon at the forefront of not only emissions reduction, but also hydrogen production and enhanced gas recovery from its own, and potentially other coal seam gas projects.”

“All three of which are important factors in the global low emission energy transition process. With licensing to apply the technology to seven additional countries overseas, we see an exciting and very large opportunity in GreenFlame for Talon.”

The Superheated Steam Technology process could potentially also be applied to Talon’s Gurvantes XXXV coal bed methane project in Mongolia.

Due to the existing infrastructure at the Jaws project, initial trials will be funded from Talon’s current cash reserves and field activities could start as soon as early 2022.

This article was developed in collaboration with Talon Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.