Wedoany.com Report-Aug. 25, TMK Energy Ltd. announced Thursday that all seven production wells in the pilot phase of the Gurvantes XXXV Coal Seam Gas (CSG) Project, located in the South Gobi basin of Mongolia, are expected to achieve optimum output rates by the end of August.

The Australian company looks to bring in partners to co-fund the next stage of development.

The company confirmed that the LF-07 pilot production well at the 100 percent-owned Gurvantes XXXV Project has been successfully completed and is undergoing final commissioning activities, with production expected to begin shortly. TMK also carried out maintenance on the LF-06 well while resources were available on site. The downhole pump was pulled, cleaned, and the fill at the bottom of the well was cleared to minimize future interruptions. LF-06 has since been placed back on production.

“With seven producing wells at the Pilot Well Project, the company now has adequate redundancy available to allow it to plan routine and hence cost-efficient preventative maintenance (i.e. scheduled workovers) in advance which will assist with the implementation of the overall reservoir management plan and ultimately, should deliver higher rates of water and gas production,” TMK said.

In December 2023, TMK signed a binding memorandum of understanding with Jens Energie LLC (JEL) for the offtake of gas from the first six pilot wells. JEL intends to convert the gas into electricity for Mongolian customers. The Gurvantes XXXV Project covers an area of about 8,400 square kilometers and is located less than 20 kilometers from the Chinese border, near existing gas infrastructure in northern China. TMK stated that this location offers potential for future exports to China.

TMK Chief Executive Dougal Ferguson said Thursday: “With the drilling operations phase now complete, there is no further major capital expenditure planned at the Pilot Well Project in the short to medium term. All the data continues to point to a positive outcome being achieved in the coming months, with reservoir pressures continuing to reduce towards the target critical desorption pressure. With the help of additional production data acquired from LF-04, LF-05 and LF-06 since early 2025, we are gaining a better understanding of the reservoir and placing a renewed emphasis on the overall reservoir management plan with the objective of maximizing both water and gas production in the near term and ultimately proving commerciality of the resource.”

The company added that a refined reservoir management plan is being prepared and will be implemented alongside LF-07’s start of production. TMK noted: “This important data point will demonstrate how much the pressure in the reservoir has been reduced at the LF-07 location (approximately equidistant from LF-01, LF-02 and LF-05) since the inception of production at the Pilot Well Project and provide additional data with respect to the impact of LF-07 on nearby wells.”

TMK emphasized that the conclusion of drilling marks the end of a period of high capital spending, with near-term focus shifting to optimizing production rates, maintaining a cost-efficient operating base, and sourcing partners for the next stage of the Gurvantes XXXV Project. In June 2024, the Mongolian Ministry of Environment and Tourism approved the project’s environmental impact assessment, granting approval for drilling and appraisal activities through 2029.