TMK Energy Ltd. entered and Terra Energy LLC have partnered to accelerate exploration of the Gurvantes XXXV coal seam gas (CSG) project covering 8,400 sq km in South Gobi basin of Mongolia, less than 20 km from the Chinese-Mongolian border.
The parties have agreed to cooperate on exploration activities within overlapping license areas. The initial joint exploration program under the agreement includes a minimum of four fully cored exploration wells and about 40 km of 2D seismic acquisition. The drilling program recently began using contractors already engaged by Terra.
TMK and Terra will evenly split drilling and seismic costs. Additional costs associated with testing specifically associated with CSG exploration will be borne 100% by the Gurvantes project partners, but any other testing work required for coal mining operations will be borne 100% by Terra.
The rights to explore for and develop coal resources and CSG resources are separate and unique, however there is significant overlap in geological data collected from drilling and exploration activities.
The term of the agreement is 2 years; however, the initial exploration program is only expected to take about 2 months. Further exploration activities may follow and will be governed by the same agreement if they are mutually beneficial.
TMK is operator of the Gurvantes XXXV project (67%) with partner Talon Energy Ltd. (33%). Terra is owner and operator of the Baruun Noyon Uul Coal Mine within the Gurvantes XXXV project area.
