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Mongolia-based microcap energy explorer TMK Energy (ASX:TMK) has kicked off a fresh round of drilling at its mammoth Gurvantes XXXV project in the vastly underexplored Gobi.
Rigs are currently on-site spudding the first of up to three pilot wells at the project, with this campaign called the Lucky Fox Project. Rigs began turning on Monday to drill the LF-05 well, expected to take seven to ten days.
The other two planned wells at Lucky Fox will take the same amount of time, seeing the campaign set for a wrap-up in early November.
The ultimate goal for TMK here is to accelerate its pathway towards a “material uplift in gas production rates” from the Lucky Fox complex – where wells will be put on production immediately following drilling, all cards in order.
Geotechs are targeting an upper coal seam known to exist underground in the Lucky Fox project area; at Gurvantes, gas is extracted from coal seam gas underground using conventional hydraulic fracturing.
“We are proud to be one if, if not the most advanced, focused and active companies in the nascent but highly prospective Mongolian coal seam gas sector,” TMK Energy interim CEO Dougal Ferguson said.
“This program … is the next crucial step towards demonstrating commercially significant gas flows can be achieved from TMK’s discovered and proven gas resource within our licence area.”
Existing shareholders have also been alerted to an Entitlements Issue on the same terms as the company’s Placement issued on October 1st.
That placement saw an Entitlement Issue on a 1 for 8 basis at 0.2cps with an attaching 1 for 2 listed option – ticker ASX:TMKO – for all eligible shareholders registered before 9th October.
The placement, for its part, was oversubscribed at $1.34M – one Australian dollar is fetching around 2,300 Mongolian Turgik – with those funds going towards the Lucky Fox campaign.
Capital raised will also go towards installing Distributed Temperature Sensing (DTS) technology at Lucky Fox – a fibre-optics based solution to measure real-time gas flow temperatures 24/7, ultimately giving geotechs higher confidence on where and where not to drill.
That confidence will be key to unlocking the ultimate value proposition for TMK Energy at its Gurvantes XXXV play – tapping into China’s energy transition.
While coal mining still dominates the resources sector globally – and while China is no stranger to coal financing in 2024 – the world’s second largest economy has been improving its ESG credentials in recent history, and a transition to gas-based energy, over coal, is very much on the Chinese economic agenda.
Given certified mammoth gas reserves buried underground the Gobi – and given the nearby proximity of Chinese energy infrastructure some 20km away – TMK Energy stands at the forefront of a unique opportunity in a hugely overlooked potential gas province.
TMK last traded at 0.2cps.
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Disclaimer: The Market Ltd had a commercial relationship with TMK Energy at the time this was written.
