TMK Energy Drills LF-07 Well, Raises $3.5M, Expands Mongolian CSG Operations

Operational Progress at Gurvantes XXXV

TMK Energy Limited (ASX – TMK) has marked a significant milestone this quarter with the successful drilling, commissioning, and gas production from its Lucky Fox-07 (LF-07) pilot well at the Gurvantes XXXV Coal Seam Gas (CSG) project in Mongolia. The well was drilled to a depth of 420 metres, intersecting approximately 54 metres of net coal, consistent with expectations and surrounding wells. Following commissioning, LF-07 commenced gas production within days, contributing to a total of seven pilot wells now producing gas at the site.

While production rates have yet to reach commercial levels, the company reports encouraging increases in gas and water output, with ongoing reservoir management efforts aimed at optimising these rates. The reservoir model is being updated with new data to better forecast production curves and inform future development decisions.

Exploration and Technical Enhancements

Building on operational momentum, TMK has initiated its 2025 exploration drilling program targeting the Soumber area east of Nariin Sukhait, a region known for coal deposits. The program aims to satisfy contractual commitments and refine understanding of coal content and permeability, critical factors for future CSG exploitation. Drilling commenced on 19 October with three exploration holes planned, and results will be disclosed as they become available.

To support these activities, TMK has bolstered its technical team with key appointments including a Mongolia-based Operations Superintendent with extensive mining industry experience, a Texas-based CSG reservoir engineer with international expertise, and a senior geoscientist in an advisory role. These hires are expected to enhance operational efficiency and reservoir management, crucial for scaling production.

Strategic Partnerships and Funding

In a strategic move to accelerate project development, TMK entered into an alliance with Beijing-based energy consultancy J-Energy. This partnership focuses on field development planning, project execution, and logistical support, leveraging J-Energy’s expertise and proximity to the China-Mongolia border to streamline operations and procurement.

Financially, TMK successfully completed an oversubscribed placement raising approximately $3.5 million, supported by existing shareholders and the Board. This capital injection strengthens the company’s balance sheet, with cash reserves of $3.1 million at quarter-end, providing runway for ongoing exploration and development activities.

Corporate Developments and Outlook

TMK is also proposing a capital consolidation to improve liquidity and attract institutional investors, subject to shareholder approval at the upcoming general meeting. Additionally, the company announced the retirement of long-serving director Tim Wise, with the Board expressing gratitude for his contributions.

Looking ahead, TMK’s focus remains on advancing the Gurvantes XXXV project through continued drilling, reservoir optimisation, and strategic partnerships. The company aims to transition pilot production towards commercial viability while exploring opportunities to bring in project partners and refine field development plans.