TMK Energy wraps up Snow Leopard campaign; maiden contingent gas resource inbound

TMK Energy (ASX:TMK) has today confirmed its South Mongolian Gurvantes XXXV coal seam gas play is likely to be more lucrative than previously thought, with a secondary coal system underground proven to extend to 175m width.

That finding came from a step out well attached to the Snow Leopard-3 well, called SL-3R. All in all, the company drilled five different wells in its Snow Leopard series; SL-5 is currently being re-spud due to technical difficulties. 

Once SL-5 is complete, TMK will have wound up its 2022 exploration campaign for good. Despite a technical hiccup on the fifth, the company stands in good stead to brag: it has effectively had a 100% success rate, as far as hitting natural gas goes. 

Independent advisors are now crafting a resource assessment for the natural gas on-site, ultimately giving the company a bankable document with which it can point to how much fuel it expects to be able to produce. 

The resource in question will be filed under ‘Contingent’ resource, which reflects a mid-level of geological confidence. The highest category is ‘Proven.’ 

Pilot plant after resource assessment 

“The completion of this successful program is a milestone for the company, and I congratulate our team in Mongolia for drilling safely in what can be challenging conditions,” TMK Energy CEO Brendan Stats said. 

“The results achieved have advanced our understanding and demonstrated incredible potential.” 

“We look forward to booking a maiden contingent resource and executing the pilot well program where we expect to produce gas to surface.” 

Ball in Talon’s court 

TMK Energy partners with Talon Energy (ASX:TPD) at Gurvantes, a company which shares its flagship assets between Mongolia and Western Australia. 

Under an earlier agreement, once SL-3R or SL-5 was completed, Talon Energy will thereby hit the end of its first stage in the farmout agreement it executed with TMK. 

With SL-3R tested and complete, that time has come. Talon, having funded the drilling of four wells, now steps to the next stage of its farmin agreement.

Stage two of the agreement sees Talon fund TMK Energy to move towards the development of a pilot plant production well on-site to demonstrate the project’s economic potential, to the tune of US$3.15m in payments. 

Talon is yet to notify whether or not it intends to proceed; it has 90 days to do so. SL-3R was completed on September 22. 

It will likely want to do this, given that TMK’s Gurvantes project is on the radar of Asian energy giant PetroChina. 

TMK Energy's three month charts. The blocky appearance comes from a relatively low trading volume

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