TMK Energy begins well optimisation campaign at Mongolian coal-bed methane project

Workover rig and crane arrive on site as company aims to boost gas output from existing wells

By LineZotpaper
Published
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TMK Energy has mobilised a workover rig and a 70-tonne crane to its Gurvantes XXXV coal-bed methane pilot project in Mongolia, kicking off a 2026 work program that includes well optimisation and fresh drilling. The company aims to boost gas flow from existing wells by installing smaller-diameter liners, with initial re-completions planned for three wells before a new well is spudded.

TMK Energy has fired up the engines on a 2026 work program at the company's Gurvantes XXXV coal-bed methane pilot project in Mongolia, mobilising a workover rig and crane to kick off a well optimisation and drilling campaign.

Set-up has now started at the 100 per cent-owned project, with the workover rig and a 70-tonne crane arriving on site last week. The first order of business was to remove the currently idle pump and production string from well LF-03, which is now being prepared for a cleanout and the first of three planned re-completions.

The work is designed to optimise gas flow from existing wells. The plan involves installing a new, smaller 5.5-inch slotted liner inside the existing 7-inch liner, before running smaller tubing and pumps. TMK says the reduced-diameter spacing should boost production from the existing wellbores. The optimisation process will initially apply to wells LF-03, LF-02 and LF-06.

Once the three workovers are in the bag, the company plans to spud a new well, dubbed LF-08. This will be drilled with a smaller hole size from the get-go to accommodate the 5.5-inch slotted liner.

If the re-completion strategy proves successful in boosting gas flows, the company says it will undertake the same process on all its existing Lucky Fox wells in 2027. That includes LF-07, which remains the star performer in the pilot field.

Across TMK's well portfolio, September average output climbed by eight per cent from August to 872 cubic metres a day, equivalent to 30,800 standard cubic feet per day (scfd). So far in October, the average has climbed dramatically from September to 950 cubic metres per day, or 33,549 scfd, suggesting the field may be rapidly closing in on commercial flow rates.

TMK Energy chief executive officer Dougal Ferguson said: "As of today, the field has been averaging approximately 950 cubic metres per day, a strong increase the gas rate achieved in September."

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Analysis

Why This Matters

  • The project's progress is significant for TMK Energy, a Sydney-based company listed on the ASX, and its shareholders who are watching for commercial flow rates.
  • Mongolia's coal-bed methane resources are strategically important for energy exports to China, and successful optimisation could support Mongolia's efforts to attract foreign investment in its resource sector.
  • If the July program delivers sustained higher output, it could pave the way for a full field development decision by 2027.

Background

TMK Energy is a Australian energy company focused on coal-bed methane in the South Gobi basin of Mongolia. The Gurvantes XXXV project is one of the largest in the region, with Mongolia's gas resource potential. The company has been running the pilot program before a possible commercial development, with operations ongoing since 2025.

Key Perspectives

Investors and shareholders: Optimisation and drilling strategy to boost flows could reduce unit costs and bring forward commercial viable if successful, but there are inherent risks in drilling operation and completion. Australian energy sector::** As Australia's focus on energy transition, Mongolia's coal-bed methane could become an opportunity for Australia to supply expertise and investment in the region. Environmental and local communities: Large-scale development of fossil fuel resource can raise concerns about water usage and environmental impact in water-scarce area of Mongolia's Gobi, and the company must abide by Mongolian regulations and stakeholder engagement.

What to Watch

  • The flow rates from the upcoming days to see or the trend continues above 1,000 cubic metres per day.
  • The results of the well LF-01, LF-02 and LF-06 optimisation and drilling in the next weeks as key test of the company's strategy.
  • The success of the July program may lead to announcement of decision to expand and later development by 2027 program.

Sources

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