Page 11 - AsianOil Week 05 2021

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South Gobi potential the term sheet is executed, with the latter
Talon said it considered the South Gobi Basin to receive 54mn Talon shares once formal
to be among the world’s most prospective CBM agreements have been struck.
basins, noting the site had very few surface con- Talon said at the time that Muchea’s selec-
straints. In a presentation on the prospective tion had followed a strategic review of possible
licence the developer noted that Gurvantes Perth Basin opportunities, with the focus of said
XXXV sat on privately owned land that was flat review being on “appraising and exploring for
and had no vegetation or access issues. conventional, gassy reservoir projects, close to
In terms of monetising a commercial dis- gas transport infrastructure and with potential to
covery, Talon noted that there were a number also contain value-adding liquid hydrocarbons”.
of foreign and domestic offtake opportunities. Casey noted that Muchea was thought to have
Gurvantes XXXV is located less than 20 km the potential for maturation into the region’s
from the Chinese-Mongolian border, close to the largest undrilled Jurassic wet gas prospect.
Northern China gas transmission network. The
proposed licence is also the closest of Mongo- What next
lia’s CBM projects to China’s West-East Pipeline The Australian junior has made some careful
(WEP) network. calculations in its exploration investments.
Indeed, Telmen has opened initial sales Upstream companies have been paring back
talks with Chinese companies and aims to their capital expenditure budgets since last
resume discussions after a licence for the field March’s oil price collapse. By negotiating to
has been awarded. enter exploration plays during the downturn in
Closer to home, Gurvantes XXXV could also the resource cycle, Talon has been able to secure
supply the nearby Oyu Tolgoi, Tavaan Tolgoi and escape strategies for both plays in case their ini-
South Gobi large-scale coal-mining operations. tial promise fails to bear out.
Talon said Telmen had already signed a memo- At the same time, both deals give the com-
randum of understanding (MoU) with a Mon- pany access to promising development projects
golian gas distributor, without providing details. located close to existing transport infrastruc-
Talon managing director David Casey said: ture. As such, commercialising discoveries and
“The farm-in provides additional portfolio exporting production to market should be easier
and risk diversity as well as being complemen- and will require less spending on infrastructure.
tary to Talon’s current onshore gas assets in the Both assets also stand to benefit from soar-
Perth Basin.” ing local and international demand trends. The
Mongolian play is close to both local energy-in-
WA acquisition tensive mining projects as well pipelines feed-
Talon entered the Perth Basin last year ing China, which is now the world’s largest gas
when it acquired a 45% interest in the Waly- importer. And while production from the WA
ering wet gas field in EP497 from operator play will be locked to the domestic market owing
Strike Energy. It announced last month to new restrictions on onshore production the
that it would expand its assets in the basin state government introduced last year, the Aus-
through the acquisition of the Muchea play tralian Energy Market Operator (AEMO) has
in EP494 and SPA-0081. Talon has agreed to warned that domestic supply shortages could
pay Macallum AUD90,000 ($69,000) once still emerge by the end of the decade.™

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