TMK moving to maiden resource for Mongolian Gurvantes CSG project; fourth well hits gas

TMK Energy (ASX:TMK) continues to boast a 100% success rate at its first drill campaign onsite the company’s Gurvantes XXXV Mongolian acreage with the most recently spud well, Snow Leopard-4, intersecting a 40m thick gassy coal seam. 

To put that 100% success rate claim into context, TMK’s Snow Leopard campaign has intersected thick gassy coal bodies in all four wells drilled to date. 

At the very least, it’s obvious the company has decent geological data covering its play in the South Gobi desert. 

And good geological data is not something to overlook: especially given the fact TMK is heading towards its maiden gas resource for the project. TMK Energy partners with Talon Energy (ASX:TPD) at Gurvantes.

A tale of two seams 

Worth noting is the unique geology underlying the area targeted by the company’s Snow Leopard campaign; characterised by one upper seam of gaseous coal deposits, followed by a level of non-commercial material, and then second lower seam of gassy coal. 

The first three wells intersected both an upper and lower coal seam; but SL-4 designed to penetrate only the lower seam at a shallower depth, so as to award the company the chance to test the lower seam’s gas contents. 

Drill stem tests have wound up, but results are not yet available, so shareholders will just have to wait. At this early stage, the company says, all signs point towards gas contents similar to that found in the first three wells. 

Worth noting is that TMK is also drilling a second hole attached to the SL-3 well, also targeting the lower seam alone, to provide greater confidence in data. 

Maiden resource on horizon 

“The exploration results continue to impress and we are pleased to be making fast progress on completing the testing of the SL-4 well,” TMK Energy CEO Brendan Stats said. 

“We continue to drill ahead on [step-out well] SL-03R for additional data on the lower coal seam, and hopefully that will be achieved in the coming weeks.”

“Following that, we look forward to booking a maiden resource and focusing our efforts on execution of the pilot well program where we hope to produce gas to surface in a relatively short timeframe.” 

PetroChina among those interested 

Earlier this month, TMK Energy announced its execution of an MOU with China’s state-owned PetroChina, which pushed the company’s share price up 30%. 

That MOU, while non-binding, comes as a boon for the company, given that it wants to sell Mongolian natural gas into the Chinese market, where the US Energy Information Administration expects shale to comprise an increasing share of the country’s energy market. 

Projected growth of CSG (shale) energy into Chinese markets through to 2040 (Source: U.S. Energy Information Administration, International Energy Outlook 2017, China Development and Reform Commission, China Customs)

Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. TMK Energy was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.