Elixir Petroleum Ltd., Perth, has signed a production-sharing contract for the Nomgon IX coal bed methane project in the Gobi Desert of southern Mongolia. The PSC was signed by Golden Horde Ltd., a private company in South Australia established in 2011 with the sole purpose of building a coal bed methane (CBM) project in Mongolia.

Elixir is set to acquire 100% of Golden Horde, a move that is scheduled for completion by mid-November subject to final shareholder approval at Elixir’s annual general meeting in early November.

Meanwhile, the execution of the PSC means that Golden Horde can begin initial exploration activities immediately. The initial work will involve field mapping prior to the onset of the northern hemisphere winter, together with processing of existing gravity data over the project area, which lies close to the border with northern China.

Elixir said this early program will assist in determining the exact location of a proposed seismic acquisition program timed for second-quarter 2019. This will be followed during the winter by an environmental impact study to be completed in time for a proposed drilling program later in 2019 and the preparation of an initial prospective resources report on the Nomgon IX CBM PSC area.

The work will be funded by a recently announced convertible loan facility put in place between Elixir and Golden Horde to enable work to begin while Elixir awaits its final shareholder approval for the acquisition. (oil and gas journal)