Big Gets Bigger - New Sub-Basin Discovered
Email Sent On: 23-11-2020
There are limited ways for Australian investors to gain exposure to the globally significant thematic of a de-carbonising and increasingly energy security conscious China.
China’s new “5 year plan” dramatically reduces its reliance on other global powers for key resources - especially its energy supply.
The plan also accelerates moving away from burning dirty coal for energy.
Elixir Energy (ASX:EXR) is exploring for natural gas on the Mongolia-China border and is one of the largest holdings in our portfolio.
EXR just took another large step towards unlocking a massive, clean burning, natural gas source right on China’s doorstep, directly across the border in politically friendly Mongolia.
Today, EXR announced the discovery of an entirely new sub-basin with a well intersecting 27m of gassy coals.
The site geologist observed “very active gas bubbling from coal” recovered to surface and mudpit - this is unusual and highly promising in coals that were at a relatively shallow depth of 260m.
We first added EXR to our long term portfolio in 2019 and in March 2020 it announced Mongolia’s first gas discovery in the Nomgon sub-basin.
With today’s news of a second sub-basin, what was already big has just gotten bigger.
We see continued upside from future exploration, especially on the back of the exceptional results delivered by EXR to date.
EXR was our top energy pick of 2019 and we have invested three separate times and continue to hold a long term position, expecting big things in 2021.
We are long term holders in EXR, it is well funded into next year with a drilling program planned for 2021.
EXR’s Managing Director Neil Young has provided comments to Next Investors on today’s news, and what it means for EXR investors. Listen to his comments here: