TMK Energy (ASX: TMK) has successfully completed its third and final pilot production well as part of the 2024 drilling campaign at its Lucky Fox site within the company’s wider Gurvantes XXXV coal seam gas project in Mongolia.
The company says its three-hole pilot production well program was completed on time and within budget, as part of TMK’s plan to accelerate production from its Lucky Fox well complex.
Continuing a consistent run of success at the project, the third well, LF-04, again encountered about 60m of net coal when intersecting the upper coal seam, consistent with results from the nearby pilot wells.
Drilling is expected to provide the extra pumping capacity needed to quickly reach the critical desorption pressures for the project which should expedite an uplift in gas production rates from all of its six pilot wells.
The company says it expects to shortly produce commercial rates of gas from the upper coal seam at the project which sits within the Nariin Sukhait area of the vast Mongolian countryside.
TMK says with the drill rig now being demobilised, it is currently installing production tubing, downhole pumps and advanced Distributed Temperature Sensing (DTS) technology in wells LF-05 and LF-06 - a technology designed to identify zones of increased gas and water influx, or permeability, for increased economic viability.
It also says completion and commissioning is underway with all six wells scheduled to be in production by the end of this month
With three new pilot production wells drilled and securely behind pipe, it is yet another significant step towards being able to meet our target of demonstrating that commercial gas flows can be achieved from the coals within the upper coal seam at the Lucky Fox pilot well complex, which represents only a very small portion of our overall contingent resource in the Nariin Sukhait area.
TMK Energy CEO Dougal Ferguson
TMK’s believes its Gurvantes XXXV project can soon become a regionally significant, reliable source of natural gas for both Mongolia’s domestic market and the regional energy infrastructure. The proximity of the project to northern China’s gas pipelines positions TMK as a key player in the regional energy landscape, with the potential to contribute significantly to Mongolia’s energy transition away from coal.
Management believes it has discovered a “world-class” coal seam gas resource in Mongolia, comprising superior technical attributes to many of its peers’ existing developed projects.
According to TMK, its contingent resource (2C) - 1214 billion cubic feet (BCF) of natural gas - is Mongolia’s largest and falls within its core Nariin Sukhait area consisting of 60 square kilometres.
TMK believes there is significant exploration upside potential at the site outside the core area, with a 5300 BCF prospective resource across its total 8400-square-kilometre ground.
Coal seam gas is considered a “clean transition fuel” because it produces about half the carbon emissions produced by coal-generated electricity and burns cleaner than other fossil fuels.
The resulting flow rates from the completed campaign will be keenly monitored by TMK and consumers alike in the coming months, as the company looks to leverage its world-class resource to supply both the domestic and mammoth Chinese energy market.
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