Desert Mountain Energy Corp. (TSXV: DME, OTC: DMEHF, FRA: QM01) has provided an operational update highlighting significant progress at the West Pecos Slope Abo Gas Field, which has been successfully operational for over two months. The facility operates autonomously, utilizing an artificial intelligence (AI) component to coordinate the integrated systems necessary for processing various crude gas components produced by the wells.
Since the plant’s startup in June 2024, DME’s technical team has navigated a series of challenges, including cybersecurity threats such as malware and ransomware, wiring issues, and components that did not meet engineering standards. To mitigate these risks, the company engaged an automation team to rewrite essential software, successfully avoiding ransom demands. Upgrades were also implemented to wiring and switchgear, while bottlenecks in the system were addressed. Importantly, the plant now complies with the latest emission regulations for 2025 at both state and federal levels, with additional upgrades planned in response to any future regulatory changes.
The West Pecos Slope Abo Gas Field was initially producing at a rate of 105 thousand cubic feet per day (mcf/day) at the time of acquisition on July 1, 2023. Following immediate and cost-effective maintenance procedures using acid and surfactant sticks, production levels surged to a peak of 1.5 million cubic feet per day (mmcf/day). The field also benefits from a permitted water disposal well, significantly reducing operational expenses. Currently, production includes approximately 30 barrels of saltwater per day (SW/D), translating to about 6 gallons per day per well. This is notably lower than typical gas wells in Southwestern New Mexico that can produce hundreds of barrels of saltwater daily, which can adversely affect revenue.
To further enhance profitability, DME has deployed its in-house workover rig for well enhancements aimed at ramping up gas production while minimizing saltwater output. The installation of booster compressors from wells farther from the plant site is expected to further amplify gas production.
In addition to its gas operations, DME’s geological team is actively exploring hydrogen opportunities in Arizona and New Mexico. They are analyzing data alongside specific downhole well log information to identify distinct geological conditions conducive to elevated hydrogen levels. Current geological assessments suggest that higher hydrogen concentrations are likely confined to specific geological settings within the company’s leases. Notably, while hydrogen production in Arizona appears linked to formations above the Precambrian layer, indications in New Mexico suggest production originates from the Precambrian rock itself.
DME is also collaborating with a private company to explore the potential of utilizing stranded gas wells in operational areas as a power source for small data centers. This initiative could provide a sustainable energy solution while maximizing resource use.
In early October, Davidson and Company LLP, DME’s new auditor, conducted a site visit to the West Pecos Slope Abo Gas Field as part of their due diligence process. This visit aimed to gain insights into the company’s operations and the challenges it faces.
Desert Mountain Energy Corp. is focused on exploring and developing resources such as helium, hydrogen, and natural gas in an environmentally responsible manner. The company aims to supply critical elements essential for renewable energy and high-technology industries. As Desert Mountain Energy continues to optimize its operations and explore new opportunities within its resource portfolio, it positions itself for growth in the evolving energy landscape.
