TMK Energy’s plan to pioneer Mongolia’s first major coal seam gas project has kicked up a gear, posting an eight per cent jump in average daily gas production for June. The company has now locked in an August start for a new drilling and workover campaign.

Average gas production at TMK’s wholly owned Gurvantes XXXV project rose to 26,200 standard cubic feet per day (scfd) during June. The result was driven by its star pilot well, LF-07, which delivered a second material gas spike of 30,000 scfd during the month.

Adding extra weight to the result, the field delivered higher overall gas production despite another well, LF-03, being offline for the entire month awaiting a pump replacement. It suggests the underlying gas flow from the field is strengthening as the dewatering process continues to draw down pressure in the coal seams and release gas.

Water production across the field remained stable at roughly 430 barrels per day.

The LF-07 well continues to be the company’s standout performer. Following a rapid rise in production, July’s production has also started with a bang, now ranging between 14,000 and 15,000scfd - about 10 to 20 per cent higher than its average rate in June. TKM says gas production has now risen month-on-month for the past year.

With encouraging data in hand, the company is now gearing up for its 2026 work program, which is expected to kick off in August. TMK has completed its drilling tender process, awarding the contract to Major Drilling, which has drilled all seven of its pilot wells to date.

The program includes drilling up to three new pilot production wells in addition to a comprehensive workover program designed to improve long-term production. The company says it has ordered the necessary long-lead items, which are expected to arrive in-country later this month.

With a second material spike in gas rate seen at LF-07 during mid-June and a continuing upward trend in overall gas production from the Pilot Well Project, we recognise that things can quickly change in the lead-up to drilling and we must remain flexible in ensuring we deliver the most capital-efficient program at the Pilot Well Project.

The new work forms part of a broader strategy to commercialise what is a massive gas resource. The Gurvantes project holds an independently certified 1.2 trillion cubic feet contingent resource, a figure derived from just 60 square kilometres of the project’s sprawling 8400-square-kilometre tenure in Mongolia’s South Gobi Basin.

The project is strategically located less than 20 kilometres from the Chinese border, placing it on the doorstep of the world’s largest energy market.

In a move to demonstrate the project’s economics, TMK is also advancing a 1-megawatt gas-to-power project with its local partner, Dashvaanjil Group. The design and engineering work is nearing completion, with the partnership gaining fresh momentum after Dashvaanjil was recently recognised as one of Mongolia’s top 100 enterprises.

Notably, the company recently shored up its balance sheet with a heavily oversubscribed A$6 million placement, leaving it with $6.3 million in cash and no debt at the end of March to fund its upcoming work.

TMK has also bolstered its operational team with the appointment of seasoned oil and gas veteran Danny Chong as production manager, who brings more than a decade of experience from Australian coal seam gas majors Origin Energy and Santos.

With gas rates building, a new drilling campaign about to kick off and a seasoned production manager at the helm, TMK appears to be knitting together what could become Mongolia’s first major domestic gas supply operation. The market will likely be watching closely in anticipation of news as the drill rods start turning in August.

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