TMK continues to turn up the gas at Mongolian pilot project

TMK Energy has continued to turn up the gas at its flagship Gurvantes XXXV Project in Mongolia’s South Gobi Basin, stacking up a string of record-breaking production results from its latest wells at the pilot project as it edges closer to commercial flow rates.

The company has also quietly locked in an extension for its chief executive officer, Dougal Ferguson. The seasoned operator, who has been involved with the project for more than five years, is widely viewed as a safe pair of hands as the gas junior edges closer to commercial production.

The company’s most recent three to four wells have proven to be real pace setters, injecting fresh energy into the pilot program and driving a noticeable uplift in both daily and monthly gas production. These newer additions haven’t just boosted volumes, they have also improved reservoir drawdown across the broader field, helping unlock stronger and more consistent gas flows.

Across the pilot, TMK has now posted a succession of record daily flow rates, with its standout seventh well, LF-07, delivering a surge to more than 31,800 standard cubic feet per day (scfd) in early March, eclipsing earlier highs near 25,000scfd, underpinning a sharp uplift in weekly and monthly averages.

‘I truly believe we are on the cusp of delivering significant value to our shareholders.’

While these records sit firmly within the confines of an early-stage pilot rather than full-field development, it’s the trend’s consistency and acceleration that are catching attention, with production stepping up month after month as each new well comes online.

The steady climb reflects a textbook coal seam gas dewatering curve, where water production gradually declines and gas desorption begins to take hold as reservoir pressure is reduced. In simple terms, the system is behaving as expected, with the recent surge suggesting parts of the field are approaching critical desorption thresholds.

Notably, LF-07 has emerged as the clear front-runner, delivering a rapid ramp-up in output and benefiting from its position within the field structure. Its performance is also beginning to demonstrate pressure communication between wells, a key indicator that the broader reservoir is starting to work as a connected system rather than a collection of isolated producers.

TMK Energy chief executive officer Dougal Ferguson said: “I truly believe we are on the cusp of delivering significant value to our shareholders and crystallising the enormous potential and value of our flagship asset. After some challenging times in recent years, TMK is now in a strong position, both operationally and financially to take this forward to the next stage and I look forward to the challenge and unlocking further value for shareholders.”

TMK has now chalked up five consecutive months of rising production, reinforcing the view that Gurvantes XXXV is moving through early dewatering into the initial phases of gas liberation. That transition is typically the inflection point at which pilot projects shift from proof-of-concept to potential commercialisation.

On the geological front, Gurvantes XXXV continues to deliver. Drilling has intersected thick, laterally continuous coal seams across the basin, in some cases exceeding 60m in cumulative thickness, providing a robust storage medium for gas and a strong foundation for long-term production.

Currently, the reservoir hosts a contingent resource of 1.2 trillion cubic feet of gas, with additional upside in a prospective resource estimated at more than 5 trillion cubic feet, highlighting the scale of the prize if the pilot transitions successfully into development.

Spanning 8,400 square kilometres, the project sits within a coal-rich basin that stretches for about 150km and hosts multiple mining operations, reinforcing the extent and continuity of the coal system.

TMK’s staged strategy is starting to pay serious dividends, with its Gurvantes project growing from an initial three-well test case into a fully-fledged seven-well pilot program. The latest well, LF-07, drilled last year, is now emerging as a standout performer in the lineup.

Each phase has sharpened the company’s understanding of reservoir behaviour, well placement, and completion design, resulting in stronger outcomes from the most recent wells.

The latest results suggest the company is homing in on more productive zones, with faster ramp-up times and stronger early gas flows pointing to improved well design and placement. The emerging connectivity between wells is also beginning to unlock a broader field response, which is critical for scaling up production.

Beyond the wellhead, TMK has been laying the groundwork for pilot development. Binding agreements, including a deal with Beijing-based J-Energy, have been inked to accelerate technical planning and open up marketing options. At the same time, a gas-to-power arrangement with German-backed Jens Energie, if formalised, would ensure early-stage volumes are monetised through electricity supply, helping Mongolia address energy security challenges by replacing imported gas with domestic supply.

To create a ready-made market for pilot production and demonstrate immediate value to potential off-takers, TMK is targeting a supply of 5,000 cubic metres of gas per day, with scope to scale up to 15,000 cubic metres per day under an extended arrangement.

Location adds another layer of appeal. The project sits less than 20km from the Chinese border and is close to existing gas infrastructure, offering a low-barrier pathway into one of the world’s largest energy markets.

Demand for gas across Asia continues to rise as countries look to balance energy security with emissions reduction, placing new projects with scale and proximity to market in a favourable position.

Looking ahead, TMK is expected to continue optimising its existing wells, potentially replicate the LF-07 design across new locations and expand the pilot footprint. Each step is aimed at building the production base required to underpin commercial development.

With a trillion cubic feet-scale resource in place and multi-trillion cubic feet upside still emerging, TMK is rapidly connecting the dots. Record flows, improving field connectivity and power conversion agreements are aligning with Mongolia’s urgent energy needs.

And with leadership now locked in and momentum building, Gurvantes XXXV looks well-positioned to shift from pilot to a production-ready asset with real commercial muscle.

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