TMK Energy Lifts June Gas Output 8% Ahead of Key 2026 Drilling Program

Steady Production Gains Highlight Reservoir Potential

TMK Energy Limited (ASX:TMK) has reported a solid 8% increase in average daily gas production at its Gurvantes XXXV Pilot Well Project for June 2026, reaching approximately 742 cubic metres per day (around 26,200 standard cubic feet). This gain came despite one of the pilot wells, LF-03, being offline for the entire month awaiting a pump replacement, underscoring the resilience of the field’s performance.

The standout feature of the month was a second pronounced gas spike at well LF-07, observed in mid-June, which saw gas rates surge rapidly over a 24-hour period. Following this, the operations team upgraded the well’s orifice plate to accommodate higher flow rates, with production rates at LF-07 ending the month 10-20% above May’s average, now ranging between 14,000 and 15,000 scfd. This marks a continuation of an upward trend in gas output that TMK has maintained for the past year, reinforcing the long-term viability of the pilot project.

Drilling Contract Awarded to Major Drilling

The company has completed its tender process for the 2026 pilot well drilling program, awarding the contract to Major Drilling, the firm responsible for drilling all seven of TMK’s existing pilot wells. Known for its safe and cost-effective execution, Major Drilling is now in final contract negotiations with TMK, with the drilling program expected to commence in August 2026.

In preparation, TMK has ordered critical long lead items to support drilling up to three new pilot production wells, alongside a comprehensive well workover program aimed at enhancing long-term production. These steps signal a strategic approach to maintaining flexibility and capital efficiency in the face of evolving production data.

Power Generation Project Advances with Dashvaanjil Partnership

Parallel to its upstream activities, TMK is progressing its Power Generation Project in partnership with Mongolia’s Dashvaanjil Group LLC. The engineering and design phase is nearing completion, setting the stage for negotiations on a commercial framework agreement covering ownership, gas and power offtake arrangements, and a joint final investment decision.

Dashvaanjil’s recent recognition as one of Mongolia’s top 100 enterprises adds a layer of credibility to this ambitious initiative, which aims to establish Mongolia’s first indigenous gas-fired power plant. This project could significantly enhance the commercial utilisation of gas produced at Gurvantes, aligning with TMK’s broader strategy to integrate gas production with local power generation.

Operational Outlook and Strategic Flexibility

CEO Dougal Ferguson emphasised the importance of flexibility in the upcoming drilling and workover program, citing encouraging production data and recent gas spikes as factors guiding a more adaptable and capital-efficient approach. With gas production climbing month on month for a full year and multiple gas spikes at LF-07, TMK’s confidence in the project’s trajectory is growing.

While the drilling contract execution and program start remain subject to finalisation, the company’s proactive ordering of equipment and ongoing monitoring of well performance suggest a readiness to capitalise on positive reservoir dynamics as they unfold.