Elixir Model as of 2022/09/16
This post and attachmentsshould not be regarded as investment advice and posters should do their ownresearch & check all documents carefully before making any investmentdecisions.
The calculations in the model are based on the estimatesand assumptions shown in the printouts of the model and are intended to be usedas a framework for investors need to do their own independent research.
If the PDF’s hyperlinks are working properly, you should beable to click on the hyperlinks to open the web pages associated with most ofthe reference documents used in the model.
Notes on the Modelling Methodology:
The preliminary modelling ofgas recovery is based on the published Nomgon-2 desorption curve and coalthickness ASX 03/12/20.
The Nomgon-2 desorptioncurve is similar to those already produced by the surrounding coal mines for Permiancoals of a similar nature.
Well performance at thispoint is at best only a preliminary guess which will be refined as productiondata for the Nomgon Production pilot is published. At that point we will have abetter idea of gas flows, depletion rates Etc.
As exploration proceeds, thenumber and extent of the sub basins and their coal thickness will also becomeclearer.
Since Cracker1S (Strat Hole)found Triassic rather than Permian coal it may indicate less prospectively in tothe NW of the tenement but there is increased perspectivity in the Tsagaan Tolgisyncline south of the ERCE Central area.
As things stand the ERCE 2U riskedresource assessment appears to stand bearing in mind that it was risked with a19% chance of geological discovery.
Page 3 of the Model showsthe prospective areas identified in the 2U ERCE resource assessment overlayedwith the existing and proposed exploration and pilot wells.
The model will ultimatelyneed to take representative production pilot data for each sub basin intoaccount in order to take it to the next level of accuracy.
The simplifiedmodelling process is roughly as follows:
·2U ERCE Net Risked Prospective resource is usedas the starting point.
·The ERCE Prospective areas are transferred to theGoogle Earth tenement area and the net drillable production areas estimated andtotaled.
·The published Langmuir desorption curve coalthickness Etc. are used to determine the available volume of desorbed gas/CubicMeter of Coal. In the Nomgon case where we have fully saturated coal and the ultimatepressure drop obtained, as the well is pumped to desorb the gas from the coalsis approximately equal to the head of water at the depth of the coal seam/s, minusthe estimated well abandonment pressure which is reached where the gasproduction rate is no longer commercial.
·A further in situ recovery factor is applied toallow for factors such as the the drainage profile between wells, which is aseries of overlapping hyperbolic cones radiating out from each well, with pressuregradients depending on the permeability of the coal, pumping rate Etc.
·Starting with the net ERCE risked 2U resource,the properties of the coal and the net desorption potential from the Langmuircurve in CM/Tonne as well as a preliminary estimated 30% in situ recoveryfactor are applied to the risked 2U resource estimate to arrive at the initial PJ/SqKM recovery number which is used in the field development planning (FDP)exercise.
As you cansee there are a lot of factors that need estimating or calculating here whichis why the initial output from the modelling exercise needs to be treated withcaution.
·Using the FDP dashboard, a number of othervariables are adjusted using their respective slide bars.
·The field development planning output is thencompared with the nominated (400 TJ/Day x 30 year) production target and the 2Urisked resource.
·The Well Selection and Configuration Dashboardson page 7 of the model are used to nominate the type of wells and number ofwell pads Etc. that are needed in order to do the CAPES & OPEX estimates.
The whole process is iterative, and something usuallychanges each time I work on the model.
Today’s printouts are the latest version.
I like to play thisexcellent video on Stunning Mongolia while I operate the Model.
https://www.youtube.com/watch?app=desktop&v=MdFrfiaEsx0
PDF’s Of the Model
Model_Pages_1_7_Overview.pdfField_Development_Planning_Dashboard.pdfLangmiure_Desorption_Curve.pdfModel_Page_11_Preliminary_Budgetss_&_Costings.pdfModel_Page_13_Strategic_Planning.pdf
As you can see, trying tocome up with a basic model starting with the Gobi Desert involves a lot ofguess work and that is why I emphasize that published model should be used onlyas a framework for further research.
I would honestly be lostwithout it however, because it has been an invaluable tool to get my headaround the potential economics of the whole Nomgon IX CBM tenement.
Although the model has grownorganically, I try to keep the format relatively constant so that it can ultimatelybe used for a direct comparison between the various CBM/CSG tenements inMongolia.
Although I have done my bestto lay out the model logically, I sympathize with HC readers that find it hardto understand particularly if they do not have an O&G background.
At this stage, I am tryingto keep format relatively unchanged in the hope that long term readers will becomeincreasingly familiar with it.
The Nomgon Pilot
From the CBM Operations Update 12 September2022
https://hotcopper.com.au/threads/ann-cbm-operations-update.6952768/
·Operationsin the Nomgon Pilot Production Program commenced last week with the spud of theNomgon-8 well. The surface conductor pipe has been installed, and drillingcommenced on Saturday 10th September.
·Aspreviously reported, the 2 pilot wells (Nomgon-8 and Nomgon-9) will be drilledby Major Drilling and reach a total depth of ~ 600m respectively in 8 ½” hole,with well planning and casing sizes similar to that of most Australian CBM wells.
·As isthe norm with CBM wells, water will initially be produced until the reservoirpressure is lowered and gas is able to be desorbed and flow.
·Thegas will be flared during the production test. The timetable for this isuncertain, given this is the first such test in the sub-basin.
·Theproduction wells will be completed “barefoot” and equipped with progressivecavity pumps (PCPs).
·Thepumps will be capable of lifting ~500 barrels of water per day (BWPD)perwell in the first instance and the evaporation pond design takes account ofthese rates –together with the very high-water evaporation characteristics ofthe Gobi region.
It is worth noting thatfully or nearly saturated coals at the right depth with reasonable permeabilityare a relatively straight forward field development proposition and in the Nomgonpilot case are likely to yield methane with low Nitrogen and impurities thatrequires a low processing CAPEX before delivery down the pipeline to market.
As we approach the Nomgonpilot production the following montage taken from the link belowis an attempt at summarizing the processes that are going on behind the scenes in the coals once the pump/s start dewatering.
You will recognize thecurves below in the Field Development Planning Window on page 7 of the model.
https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=2526&context=etd
All the best and GLTA
OGP
(20min delay)