Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • TMK signs drilling contract with Canada-listed Major Drilling Group for the LF-07 production well

  • Larger TXD200 rig to be used for the first time, offering enhanced drilling capability

  • Share price surged 25% to AUD 0.003 following the announcement on 8 July 2025

TMK Energy Limited (ASX:TMK) has executed a drilling contract with Major Drilling Group, a Canadian-listed international drilling firm, to drill and complete the LF-07 pilot production well at its Gurvantes XXXV Coal Seam Gas (CSG) Project in Mongolia.

The LF-07 well is scheduled to spud in the second half of July 2025, following Mongolia’s Naadam festival holiday period. The drilling campaign will utilise the more powerful TXD200 rig, which features an advanced mud system and offers enhanced drilling performance. This marks the first time TMK will employ the upgraded rig.

This drilling initiative is part of the company’s 2025 drilling program, which includes one new production well and up to five exploration wells in a highly prospective area located 60 kilometres east of Nariin Sukhait. The program satisfies the company’s minimum 2025 work commitments under its Production Sharing Contract.

The new LF-07 production well is strategically positioned to infill the existing pilot well pattern. Located up dip from LF-05 and along strike from LF-01 and LF-02, it is expected to improve both data collection and gas production rates from the pilot project. The well will also help evaluate reservoir pressure drop continuity, following encouraging pressure build-up test results from LF-01, LF-02, and LF-03.

The company emphasised that its current vertical production wells remain central to proving commercial gas flows from the upper coal seam. The ongoing performance of the pilot project, which has already succeeded in significantly lowering reservoir pressure over a 24-month period, supports the company’s broader commercial development goals.

Following LF-07’s completion, TMK intends to launch its exploration campaign, involving up to five additional wells. The exploration wells are considered low-cost but high-impact, targeting further increases to TMK’s already substantial 2C contingent resources in the region.

The market reacted positively to the news, with TMK shares rising 25% to AUD 0.003 on 8 July 2025.