TMK Energy (ASX:TMK) increases gas production as Mongolia pilot drilling plans advance

TMK Energy has reported higher gas production from its Gurvantes XXXV Coal Seam Gas Project in Mongolia while advancing preparations for its next pilot drilling program and progressing its beneficial use of gas initiative to improve reliability of power supply at the Pilot Project.

The company’s latest operational update outlined continued production growth from existing wells, the completion of an independent technical review and ongoing discussions around the future use of natural gas within Mongolia’s power generation sector.

Highlights

• Average daily gas production in April 2026 reached 663m3/day, a 13% increase over February’s average gas production
• April marked TMK’s second highest monthly gas production rate on record, exceeded only by March
• LF-07 gas production continued increasing following production curtailment in late March
• Water production remained steady at approximately 490 bbls per day
• New pilot production wells are expected to commence drilling in Q3 2026
• TMK continues progressing its beneficial use of gas initiative to reduce flaring and improve power reliability at the Pilot Project

Since the curtailment of LF-07 production in late March, TMK said its wells have continued to be managed in accordance with its existing reservoir management plan, which the company said has delivered a steady increase in gas rates alongside relatively stable water rates over the past nine months.

Apart from a recent mechanical pump failure at LF-03, the company said it has not experienced pump blockages or workovers, which has resulted in high pump uptime and more water extraction over the period in question.

During April, TMK completed its third independent technical review, which assessed both the upcoming drilling program and the current reservoir management plan.

The review included existing and prior management as well as independent experts who have worked on coal seam gas projects in Australia and around the world.

While the review was generally supportive of the current reservoir management plan, TMK said several new optimisation techniques for both new and existing wells will now be implemented.

The company said it recognises the importance of replicating LF-07 well performance with either the new pilot production wells or some, or all, of its existing wells from LF-01 to LF-06.

New pilot production wells are expected to commence drilling in Q3 2026, while TMK continues accelerating efforts to find a permanent solution for uninterrupted power supply using gas produced from the Pilot Project, with excess power being delivered to local users.

TMK Chief Executive Officer Dougal Ferguson said production growth and the beneficial use of gas initiative remain priorities for the company.

“Our immediate focus is the upcoming pilot well drilling program, as well as the important need to have the beneficial use of gas initiative in place as soon as possible, to not only reduce the flaring of gas, but also to lock in our own permanent power supply for the Pilot Project.”

During his recent visit to Mongolia, Ferguson also held discussions with government and private consortiums regarding natural gas for industry and domestic power generation.

TMK said discussions remain preliminary, but noted its Gurvantes XXXV Project continues to gain recognition in Mongolia as a potential solution to increasing energy supply shortages.

The company also continues engaging with the Australian Embassy and Austrade as it progresses the project in Mongolia.

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