TMK Energy sees Australian partner at Mongolian Gurvantes CSG project earn-in to 33%

TMK Energy Limited (ASX:TMK) is to move ahead to the construction of its pilot plant project in the Mongolian Gobi Desert Gurvantes XXXV project with partner Talon Energy (ASX:TPD) moving ahead to earn its 33% interest in the project. 

TMK will now stand as operator with a 67% interest. 

That 33% interest will come by way of funding development of a pilot plant well to the tune of US$3.15m (A$4.6m) with construction expected to commence in early 2023. 

Payment for expectation-beating reserves

Talon will also hand TMK a $1.1m payment following “an independent assessment of an initial 2C Contingent Resource estimate of 1.2TCF.” 

That payment ultimately comes by way of the resource being above expectations; Talon had agreed to the stipulation in the early days of the partnership.

TMK’s Snow Leopard drilling campaign through 2022 consistently beat expectations, and shored up confidence in the company’s acreage, which includes a two-tier gaseous coal body system underground. 

While there is no guarantee the supermajor will move towards commercial partnership, TMK’s Gurvantes project has also landed on the radar of PetroChina. 

Drilling of the wells that will underpin the pilot facility are expected to be spud no later than late Q1 of 2023; surface facilities are expected to be completed before H2 of the calendar year. 

A great endorsement: Management 

“Talon has been involved in the Gurvantes XXXV Project since February 2021, and the positive election to become a partner in our Project is a great endorsement and a reflection of the value,” TMK Chief Brendan Stats said. 

“We now look forward to the next stage of the Project, the Pilot Well Program, which aims to flow gas to surface over an extended production test.” 

“With the US$3.15 million funding by Talon for the Pilot Well Program, means we can proceed with the next important phase of the Project and head into 2023 with an active, well-funded work program.”

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