TMK Energy (ASX:TMK) May operations update shows rising gas production and strategic program readiness

TMK Energy reported an increase in daily gas production during May 2026 as the company prepares for its 2026 drilling and workover program.

Operational efforts are focused on finalising pilot production well designs and implementing lessons from LF-07, the field’s highest performing gas well, alongside progressing a 1MW pilot Gas to Power project in partnership with a major Mongolian LPG importer.

Highlights

• 2026 pilot production well drilling plans advanced, with tender announced and long lead items being acquired for July commencement.
• Modified drilling and completions design leverages LF-07 learnings to improve well performance.
• Average daily gas production increased to ~687m³/day, a 4% rise over April, despite partial downtime across several wells.
• LF-07 gas rates up ~50% since February, approaching higher levels observed in March.
• Gas to Power agreement executed with a major Mongolian LPG importer to convert gas production into electricity, with detailed design underway.

Average gas production for May was ~687m³/day (~24,260 scfd), up 4% from April’s ~663m³/day, despite LF-03 being offline for a pump replacement, LF-02 temporarily shut-in for a pressure build-up test, and LF-01 undergoing mechanical repairs, while water production declined approximately 10% to 450 barrels per day, reflecting the production interruptions noted above.

Gas rates at LF-07 continue to rise, exceeding 10,000 scfd for May and reaching current levels between 11,000 and 12,000 scfd, representing a 10–20% increase above the month’s average.

Following the appointment of Mr. Danny Chong as Production Manager, the operations team has identified optimisation opportunities for existing wells and contributed to the design of new wells and potential workovers, which are expected to enhance overall gas output.

Concurrently, the 1MW Gas to Power project is intended to provide TMK with a more reliable electricity source, reducing reliance on diesel generators, mitigating gas flaring, and supporting operational efficiency across the field.

The company has also engaged with Mongolia’s Mineral Resources and Petroleum Authority of Mongolia regarding conversion of discovered resources within its 8,400km² exploration area to an exploitation licence.

TMK expects to initiate this process following the completion of the 2026 work program, which will provide additional data to assist in reserves evaluation.

TMK Energy’s Chief Executive Officer Mr Dougal Ferguson said:

“New analysis undertaken by the operations team has also identified several production optimisation opportunities which we will be putting into practice over the coming months. With gas rates continuing to rise at LF-07, and with a use for the gas in power generation, we are highly confident that we will achieve our production target by the end of this year and be in a position to declare the field commercial”.

TMK Energy’s May performance confirms incremental improvements in gas production, while the forthcoming drilling and workover initiatives, coupled with Gas to Power integration, position the company to progress toward commercialisation.

The 2026 program is expected to generate data that will support a comprehensive evaluation of the field’s reserves and inform future operational planning.

Successful implementation of the Gas to Power project could provide a tangible demonstration of coal seam gas as an economically viable source for electricity in remote locations, reducing reliance on external power and flaring.

Looking ahead, these combined efforts will be critical to advancing the field’s commercial potential and reinforcing TMK Energy’s strategic development pathway in Mongolia’s energy sector.

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