Talon is enjoying the sweet scent of success after the pilot well program at its Gurvantes XXXV coal seam gas project in Mongolia achieved continuous gas flow ahead of expectations.

Talon Energy (ASX:TPD) noted that all three wells – Lucky Fox-1, Lucky Fox-2 and Lucky Fox-3 – have now achieved critical desorption pressure and were flowing gas permanently.

While the wells still have a significant hydrostatic head that is being pumped off in accordance with the reservoir management plan, the achievement is nonetheless a key milestone towards proving the project’s ability to flow gas commercially.

Talon notes that it will be several more weeks before the hydrostatic head is reduced to the optimal level that will allow initial gas rates to be measured and reported.

Dewatering of CSG wells, which involves the production of water in a controlled manner, is essential to reduce pressure in the coal seam before gas can be produced in any significant quantities.

“The pilot production well program continues to exceed our expectations and we are looking forward to providing the market with an update on the initial flow rate from this exciting project in several weeks’ time,” managing director Colby Hauser said.

“We extend our thanks to our partner in this project, TMK Energy for the excellent project management thus far.”

Pilot production

Since commissioning of the pilot well program about three weeks ago, all three wells have been continuously pumping water with speeds increasing gradually to slowly reduce the fluid levels in the wells and therefore hydrostatic pressure in the reservoir.

Progress has been quicker than expected though with first gas produced just a week after testing started.

 

Continuous flare achieved from Lucky Fox –2. Image: supplied

 

The wells are currently producing approximately 600 barrels of water per day and the fluid levels in the wells are continuing to slowly decrease.

While pump speeds will continue to be increased over the coming weeks, achieving critical desorption pressure means that the current low gas rates are expected to gradually increase as is typical of CSG wells.

Once optimal fluid levels are reached, the pump speeds will be managed to maintain the hydrostatic head at a constant level and initial gas flow rates measured.

The pilot wells will then be placed on an extended production test, during which the flow rates are expected to increase as the pressure sink continues to expand from the immediate surrounds of the well bore further into the coal seams, thereby freeing up more gas to flow into the wellbore.

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.

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