The Elixir Energy Ltd (ASX: EXR) share price is racing higher today following the release of an operations update.
At the time of writing, the energy producer's shares are up 7.14% to 30 cents.
Let's take a closer look at what the company announced.
How is Elixir tracking along?
According to its release, Elixir provided a mixed update to its operating performance over the last month. This relates to its current exploration campaign at its wholly-owned Nomgon IX Coal Bed Methane (CBM) Production Sharing Contract (PSC).
Located within the Nomgon project in Mongolia, the company advised that it's West Yangir-1 core-hole has intersected 48 meters of coal. This was achieved upon drilling to a depth of 350 meters. However, the drilling hole has been met with some difficulty. The company stated that it has encountered various mechanical issues along with unfavourable drill-hole conditions.
Moving across to the far North-West of the PSC, the Manlai-1S exploration well has also faced mechanical issues during drilling. As a result, the planned target depth was not reached.
While the first two wells stumbled across drilling problems, investors appear to have focused on the new coal find. Elixir highlighted that it moved the Top Diamond LLC rig to a new sub-basin in the PSC, named Kingston-1S. Upon spudding the well, the company discovered new coal.
Elixir managing director, Neil Young said:
The very thick total coals measured in the West Yangir-1 well have been highly encouraging, as has the discovery of coals in the drilling to date in the new Kingston location. Our ongoing program for 2021 (and the years thereafter) has many more wells to come and is still being vigorously prosecuted, notwithstanding the global pandemic. Mongolia's resilience in dealing with the varying challenges that COVID has thrown up is to be commended.
In addition, Elixir's 2021 2D seismic program has finished its originally planned 220 kilometres phase. Processing and interpretation are currently being conducted to find new exploration targets for future drilling programs. An expansion of the seismic program is also being planned.
About the Elixir share price
Since mid-April, Elixir shares have had a disappointing run, falling close to 40% from its multi-year high of 51 cents. Although, when comparing against this time last year, the company's share price took off, gaining more than 650%.
Elixir has a market capitalisation of around $249 million, and approximately 891 million shares registered on its books.
