15 hours Ago By Craig Nolan
TMK Energy has turbocharged its record run with a further 14 per cent jump in gas production last month to 9100 cubic metres at its Pilot Well project, which is part of the company’s wider Gurvantes XXXV coal seam gas project in southern Mongolia. Continuing with the record theme, the company also revealed it smashed out a new record daily gas volume of 465 cubic metres on March 4. TMK Energy’s Lucky Fox-01 well flaring gas.
The well is part of TMK’s Pilot Well project in rugged Mongolia. The company recorded a significant increase in gas production in January due to its three new Lucky Fox wells, LF-04, LF-05 and LF-06 coming online. January’s record 8000 cubic metres of gas production blasted its previous high to oblivion, notching up a 40 per cent increase above its best-ever level at Pilot Well.
TMK says the reservoir pressure continues to decline towards critical desorption levels, with an overall improvement in the depressurisation of the reservoir. The decline was confirmed last month by a pressure build-up test. Management says a key objective this year is to reduce the reservoir pressure below the critical desorption pressure, which is why it drilled the three additional production wells.
Gas rates are anticipated to increase substantially when the objective is achieved. ‘We remain highly confident that the Pilot Well project will confirm a commercially viable resource.’ The wells provide the extra pumping capacity needed to quickly reach the critical desorption pressures for the project to deliver an immediate uplift in gas production.
Notably, fluid levels in five of the six wells have reduced to design levels and pump speeds are being reduced due to the lower water production levels. The company’s new production record was achieved despite one of its better production wells, LF-05, recording about 67 per cent downtime for a pump clean-out and workover. LF-05 is the sole well not producing at its design fluid level.
Management believes it now has sufficient data to actively manage the pump speeds in each of the wells to ensure it maintains the correct water levels and water production levels in each of the wells, in line with TMK’s reservoir management plan. With the drop in the wells’ water production rates, pump speeds are being decreased slowly to ensure water production remains above minimum levels to maintain efficient pump operation. TMK Energy’s chief executive officer Dougal Ferguson said: “We have successfully operated the Pilot Well project through a second very cold and tough winter.
This demonstrates that the greater development of this enormous new coal seam gas resource is very achievable in Mongolia. We remain highly confident that the Pilot Well project will confirm a commercially viable resource in the coming months.” The company says the recent implementation of advanced Distributed Temperature Sensing (DTS) technology in wells LF-05 and LF-06 is providing it with valuable information on reservoir productivity, with preliminary interpretation of its data showing a large portion of the reservoir is producing gas and water efficiently.
No warning signs have been kicked up from the data analysis to date. The DTS technology is designed to identify zones of increased gas and water influx, or permeability, for increased economic viability. The company says it expects to shortly produce commercial rates of gas from the project, consisting of 60 square kilometres within the Nariin Sukhait area of the vast Mongolian countryside.
It believes the Gurvantes XXXV project can soon become a regionally significant, reliable source of natural gas for both Mongolia’s domestic market and the regional energy infrastructure. The project’s proximity to northern China’s gas pipelines places TMK in an enviable position and potentially positions it as an emerging key player in the regional energy landscape. Mongolia is keen to transition away from energy produced from burning coal.
Coal seam gas is considered ideal as a “clean transition fuel” because it produces about half the carbon emissions produced by coal-generated electricity and burns cleaner than other fossil fuels. TMK says it has discovered a “world-class” coal seam gas resource in Mongolia, comprising superior technical attributes to many of its peers’ developed projects. The contingent resource (2C) of 1214 billion cubic feet (BCF) of natural gas is Mongolia’s biggest, according to the company.
Management believes it possesses significant exploration upside potential outside its core area, with a 5300 BCF prospective resource across its total 8400-square-kilometre ground. If TMK can continue its record-setting trend, it may be on a pathway to becoming a valuable contributor to the region’s massive future energy requirements. Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.
com.au.
