TMK Energy Limited (ASX: TMK) (“TMK” or the “Company”) is pleased to provide an update regarding its Pilot Well Program and exploration activities in the Gurvantes XXXV CSG Project area (TMK 67% and Operator, Talon Energy 33%) situated in the South Gobi Basin of Mongolia.
Successful performance of pilot production wells in Nariin Sukhait, all in line with expectations.
Continuous gas flares observed from each of the three pilot wells.
Significant 45-metre gassy coal seam intersected at the ‘Terra’ exploration area located 100 kilometres east of Nariin Sukhait.
Expansion of the exploration program at ‘Terra’ to now include four additional wells.
Ongoing 2D seismic program and exploration activities in the northern part of the license area.
Pilot Well Program (Nariin Sukhait):
The pilot well program showcases a consistent performance. The continuous flow of methane gas to the surface is evident, and it is being flared from each of the three pilot wells. The wells, Lucky Fox – 1 and Lucky Fox – 2, have shown steady water rates and increasing gas rates throughout September. However, Lucky Fox – 3 underwent multiple pump shutdowns due to coal solids present in the water, leading to regular pump maintenance.
After a comprehensive review, coal fines at the base of the well were identified as the likely culprit for the pump issues. Post-cleanup, the well is now functional and performing as expected. Predictably, such coal fines are common during the initial phases and shouldn't be a regular concern.
Water production rates from all the wells are currently within the 500 to 600 barrels of water per day (bwpd) range. The consistent decrease in reservoir pressure has led to a rise in gas production, though final flow rates are yet to be ascertained.
The joint exploration program between Gurvantes XXXV Project and Terra Energy, which commenced on 28 August 2023, focuses on the acquisition of four fully cored exploration wells and roughly 40 kilometres of 2D seismic. The drilling locations were strategically chosen, bearing in mind the objectives of both Terra and Gurvantes XXXV Project.
Thus far, three cored exploration wells have been concluded. The latest well, BHN23_002C, discovered a coal thickness of around 45m with moderate to high gas contents. This find is significant and aligns with the geological formation identified in the Narrin Sukhait area. Owing to this promising result, four more cored wells have been planned for completion this year.
Lastly, the 2D seismic acquisition which began in late September is progressing well, with data collection expected to wrap up in October. The northern part of the Project area is undergoing additional exploration, with potential further research in 2024 depending on the outcomes.
Mr Brendan Stats, TMK Energy’s Chief Executive Officer commented: “The primary focus of the Company at present is to continue to keep the three pilot wells running as near to 100% of the time as possible with the aim of establishing gas flow rates to demonstrate commerciality. Despite the minor operational challenges associated with the pump at Lucky Fox - 3, our team is doing a great job keeping the wells running and remediating any issues quickly and efficiently.
Encouragingly, we have also intersected a thick gassy coal seam at Terra Energy’s Baruun Noyon Uul area in the east of the Project area, 100km east of Narrin Sukhait. No CSG exploration drilling has previously been undertaken in the Terra area and the results to date have given us the confidence to continue with an expanded program. What is most significant is that we have intersected thick gassy coals seams in both the west of the Gurvantes project and now the eastern portion, in what is interpreted to be the same geological formation, approximately 100km apart.”
Mr Matthew Crawford, Terra Energy’s Executive Director commented:
“Terra is pleased to be working with TMK and adding significant value to our respective businesses. To date the exploration has been done efficiently and effectively with our respective exploration teams working well together. Terra is very supportive of this project, and we look forward to expanding the exploration activities in 2024 as we have a substantial resource area of coal which is yet to be explored for CSG.”
TMK Energy Limited is listed on the Australian Stock Exchange. TMK is led by an Australian and Mongolian team bringing together the expertise and experience to develop the Gurvantes XXXV CSG Project.