TMK’s Snow Leopard takes its first bite of gassy coals in Mongolia

TMK’s first Mongolian coal seam gas well has had early success, intersecting 44m of gassy coal with high gas content and saturation.

Snow Leopard-1 intersected the coal from a depth of 406m in the upper coal seam with the gas content of between 7.5m3 per tonne to 12.5m3/t being consistent with the company’s current geological understanding of the Gurvantes XXXV project in the South Gobi Basin.

TMK Energy (ASX:TMK) is currently carrying out downhole geophysical surveys and a drill stem test of the upper coal seam before continuing drilling to target a second lower coal seam.

“I am pleased that our first well has intersected a thick coal seam, with preliminary results indicating that the high gas contents and coal thickness compare favourably with Australian CSG projects,” chief executive officer Brendan Stats said.

“The initial results from Snow Leopard – 1 are positive and go a long way to validating our geological model and interpretation of our extensive existing data set.”

More drilling to come

While the first well has already delivered an early bite on the prey, it is worth noting that TMK has another three CSG wells to drill over the next three to four months.

These wells, which are spaced about 3.5km apart, will target the highly prospective coal seams that was first identified at Nariin Sukhait from existing exploration data and coal mining activities and have now been validated by the initial results from Snow Leopard-1.

Once drilling is completed, the resulting data is expected to allow the company to convert part of the gross prospective resource of 5.96 trillion cubic feet of gas.

The current drilling is funded by partner Talon Energy (ASX:TPD) under an existing US$4.65m ($6.46m) farm-in agreement.

Initial funding of US$1.5 million is allocated to the current four well drilling and testing program.

The second stage of funding, being US$3.15 million, is currently budgeted towards the pilot well program being planned for later this year, should Talon elect to proceed with the second stage of the farm-out agreement.

This article was developed in collaboration with TMK Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.