TMK Energy plans new LF-08 gas well in Mongolia as it shifts focus to near-term output

TMK Energy (ASX:TMK) plans to drill a new production well, LF-08, at its Gurvantes XXXV coal seam gas project in Mongolia. The company describes it as an up-dip well and an expected early gas producer. Its 29 July statement refers to LF-08 together with up to six well re-completions, though the wording is not complete. The company has not stated when drilling will start.

Why it matters

Gurvantes is TMK's main asset and the one it owns outright. Its latest listed estimate is a contingent P50 resource of 1,200 bcf of gas, stated in April 2024. Contingent means the gas has not yet been shown to be commercially recoverable. Current output is small by comparison: about 28,000 scfd from the pilot project, with the June quarter averaging about 24,630 scfd. If LF-08 and the re-completions lift flow rates, that would be the first step toward showing the resource can be produced at scale.

What is settled and what is not

• Major Drilling won the regulatory drilling tender in June.
• Contract negotiations are continuing. The company expects the contract and well spud dates to be finalised "in the coming weeks" as of its 29 July report.
• The company has not published a spud date for LF-08.

The work program has already changed. After an independent technical review in April, TMK reshaped its 2026 plan to concentrate on near-term gas production and on using existing wells through re-completions. Any timing set before that review may no longer apply.

Where the company stands

Gas output rose month on month through the June quarter, which the company says was a record. LF-07 was producing 14,000 to 15,000 scfd by quarter-end. TMK reported about $5.4 million in cash and no debt at 30 June, and says the 2026 program is fully funded.

Separately, TMK signed a memorandum of understanding with Dashvaanjil Group to develop a 1MW gas-to-power project beside the pilot wells. It would run on TMK's gas plus LPG supplied by Dashvaanjil.

Other holdings

TMK also holds minority interests of between 11.36% and 50% in other projects, including Napoleon, Rock Creek, Rend Lake, Lyons Point, West Klondike and Stary. Their estimates date from between 2008 and 2022, and the company has not stated more recent figures here.

The 1,200 bcf Gurvantes figure also predates the changes to the work program and the pilot results reported this year.