TMK Energy reports a steady increase in gas output and launches a 1MW Gas to Power pilot in Mongolia, aiming to boost well performance and secure a production license.
- May gas production rises 4% to 687m3/day
- Drilling tender announced for three new wells
- Modified well design targets improved productivity
- LF-07 well gas rates up 50% since February
- Signed agreement for 1MW Gas to Power pilot project
Steady Production Growth Despite Operational Interruptions
TMK Energy Limited (ASX:TMK) recorded a 4% increase in average daily gas production during May 2026, reaching approximately 687 cubic metres per day. This growth occurred even as several wells faced downtime for maintenance and testing, including LF-03’s pump replacement and pressure tests on LF-02. Water production dropped by about 10%, reflecting these operational pauses.
Notably, the LF-07 well continues to outperform, with gas rates rising roughly 50% since February and currently fluctuating between 11,000 and 12,000 standard cubic feet per day. This well’s May average was the highest to date outside of March’s peak, signalling a positive trajectory in well performance.
Drilling and Workover Program Set to Begin in July
TMK has formally announced a drilling tender for up to three additional pilot production wells, with work expected to start in July 2026. The company has ordered long lead items and adopted a modified drilling and completions design featuring reduced hole and pump sizes. This adjustment is intended to enhance productivity, drawing on insights from LF-07’s success.
Production Manager Danny Chong’s recent appointment has accelerated efforts to optimise existing wells and influence the design of new wells and potential workovers. These initiatives aim to elevate gas output across the field and support TMK’s goal of declaring the Gurvantes XXXV coal seam gas project commercial by year-end.
Gas to Power Pilot Project Targets Reliable Off-Grid Energy
In a strategic move to improve operational reliability and reduce costs, TMK signed an agreement with one of Mongolia’s largest LPG importers to develop a 1MW Gas to Power pilot project. This initiative will convert produced gas into electricity for onsite use, mitigating frequent power interruptions that currently necessitate costly diesel generator backups and delay production processes.
Beyond operational benefits, the pilot aims to demonstrate coal seam gas as a viable fuel for power generation in remote and off-grid settings, potentially opening new commercial avenues and supporting Mongolia’s energy diversification.
Progress Toward Production Licensing
TMK has engaged with the Mongolian regulator MRPAM to discuss converting its significant discovered resources within the 8,400 square kilometre exploration area into an exploitation license. The company plans to initiate this licensing process after completing the 2026 drilling program, which is expected to yield additional data critical for reserves evaluation and regulatory approval.
Bottom Line?
TMK’s steady production gains and strategic Gas to Power pilot position it well for a commercial declaration, but the success of upcoming drilling and regulatory milestones will be pivotal.
Questions in the middle?
- Will the modified drilling design deliver sustained production improvements across new wells?
- How will the Gas to Power pilot influence operational costs and expand commercial opportunities?
- What timeline is realistic for converting exploration licenses to production licenses following the 2026 work program?