Highlights

  • TMK shares surged 13.79% to AUD 0.16 on 9 April 2026 following record production growth.
    • March gas output rose 48% month-on-month, highlighting accelerating reservoir performance.
    • Record daily production exceeded 1,350m³/day, confirming commercial gas desorption.
    • MoU signed with regulator enables gas use for power with clear development pathway
    • 2026 work program approved, supporting further drilling with expansion drilling plans.

TMK Energy Ltd (ASX:TMK) shares climbed sharply by 13.79% to AUD 0.16 during the morning session on 9 April 2026, following the release of a March 2026 operations update that highlighted strong production growth and key regulatory progress. Despite today’s rally, the stock remains down approximately 25% over the past year, reflecting a longer-term period of development and project execution.

Today’s positive share price reaction appears closely linked to a combination of record gas production levels, confirmation of reservoir performance, and a formalised pathway toward commercialisation through engagement with Mongolian regulators.

TMK Energy is an ASX-listed energy company focused on the exploration and development of coal seam gas (CSG) resources in Mongolia. The company’s flagship asset, the Gurvantes XXXV Project, is 100% owned and spans a large prospective area of approximately 8,400 square kilometres. The project is positioned within a region that is seeking to establish a domestic gas industry, providing a potential long-term growth opportunity as Mongolia looks to diversify its energy mix.

The company’s strategy centres on proving commercial gas flow, advancing pilot well operations, and ultimately transitioning toward full-scale production supported by infrastructure and regulatory approvals.

Record Production Signals Reservoir Breakthrough

The March 2026 update highlighted a significant step forward in operational performance, with TMK reporting another record month of gas production at its Pilot Well Project.

Average daily gas production increased by 48% month-on-month to approximately 866 cubic metres per day, up from around 583 cubic metres per day recorded in February. This sharp increase reflects improving reservoir conditions and the effectiveness of ongoing operational efforts.

A key milestone was achieved on 21 March, when the project recorded a peak daily production rate of approximately 1,353 cubic metres per day, equivalent to around 47,800 standard cubic feet per day. This marked the highest production level recorded to date at the project.

Importantly, the company confirmed that gas desorption is now occurring within the reservoir. This process is a critical indicator in coal seam gas projects, as it demonstrates that reservoir pressure has been sufficiently reduced to allow gas to flow, supporting the potential for sustained production.

Operational Adjustments Support Sustainable Growth

Following the rapid increase in gas production, TMK implemented a series of operational adjustments to ensure safe and stable operations. Production at the LF-07 well was temporarily curtailed to allow for modifications to surface facilities and to manage reservoir conditions effectively.

These changes were aimed at ensuring that the well could safely handle higher gas flow rates while also preserving the reservoir for long-term production. After the completion of these measures, gas production resumed and is once again trending upward, with current output levels around 23,000 standard cubic feet per day.

The company noted that future increases in production will be managed carefully to balance operational safety, reservoir integrity, and the objective of maximising recoverable gas volumes over time.

Water production across the field remained stable during the period, averaging approximately 490 barrels per day, indicating consistent reservoir behaviour alongside increasing gas output.

Regulatory Progress Provides Development Clarity

In addition to operational achievements, TMK reported a significant development on the regulatory front. On 19 March, the company signed a Memorandum of Understanding (MoU) with Mongolia’s regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM).

The MoU establishes a framework that allows TMK to utilise produced gas for its planned power generation project, even prior to the granting of a full exploitation license. This represents an important step in advancing the commercial use of gas produced from the project.

The agreement also outlines a pathway for transitioning parts of the project area toward an exploitation license, which would enable full commercial production in the future. This progression from exploration to exploitation is a critical phase in the lifecycle of energy projects.

The engagement between TMK and the regulator reflects a coordinated effort to support the development of a domestic gas industry in Mongolia, with both parties indicating a strong intent to accelerate project advancement.

Approved Work Program Supports Next Phase

Further reinforcing project momentum, TMK confirmed that its 2026 work program and budget have been formally approved by the regulator.

The approved plan includes the drilling of three additional production wells at the Pilot Well Project during the year. This next phase of drilling is expected to build on the current production results and further evaluate the scalability of the resource.

The approval of the work program follows a review of the company’s 2025 exploration activities and reflects regulatory confidence in the project’s progress and future potential.

With approvals in place, TMK is now positioned to move forward with the next stage of development, which includes expanding production capacity and continuing to refine its operational approach.

Strategic Implications for Project Development

The combination of rising gas production, confirmed reservoir performance, and regulatory support provides a clearer pathway toward commercialisation.

The confirmation of gas desorption is particularly significant, as it demonstrates that the project has reached a stage where commercially meaningful gas flows may be achievable. At the same time, the ability to utilise gas for power generation prior to full licensing introduces an early-use case that could support project economics.

The broader regulatory alignment, including the MoU and approved work program, suggests that key stakeholders are working collaboratively to advance the project. This coordinated approach may help reduce development timelines and improve execution certainty.

What This Means for Investors?

Today’s strong share price increase reflects market recognition of both operational and regulatory progress at the Gurvantes XXXV Project.

The sharp rise in production, coupled with the confirmation of gas desorption, provides evidence of improving reservoir performance, which is a key factor in assessing the viability of coal seam gas projects.

At the same time, the MoU with the regulator introduces a clearer framework for commercialisation, particularly through the potential use of gas for power generation and the pathway toward an exploitation license.

While the stock remains down over the past year, the latest update highlights measurable progress across multiple fronts, which appears to be driving renewed investor interest. Market participants are likely to continue monitoring production trends, drilling outcomes, and further regulatory developments as indicators of future progress.