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Mongolia: Jade Gas drilling program focused on increasing resources


01 Mar 2023

  • Jade to commence drilling of an additional four wells in the Red Lake area
  • Initial program is designed to expand Contingent Resources and inform framework of further drilling programs
  • A number of commercial customers on Jade’s doorstep looking to secure future supplies of natural gas
  • Extended testing of Red Lake area as part of the upcoming pilot program remains on track to commence March 2023
Photo - see caption

Jade Gas has confirmed the commencement of its CY2023 exploration program, which is initially targeting natural gas from three coal seams of interest in the northern extension of the Red Lake area within its TTCBM Project permit, in the south Gobi region of Mongolia.

Red Lake Exploration Drilling

Jade’s CY2023 drilling program received approval from the regulator, Mineral Resources and Petroleum Authority of Mongolia (MRPAM), which allows the Company to commence on-ground activities. New drilling will build on the successful 13 well program executed in CY2022 that delivered outstanding gas results leading to the largest gas booking of Contingent Resources in Mongolia at the time. The CY2023 exploration program is expected to commence in March with four wells to be drilled in the northern area of Red Lake.

Success from the drilling of these wells is designed to expand the size of the current 246 Bcf(1) unrisked Gross 2C Contingent Resources, help shape upcoming drilling programs and support commercial discussions that are in progress with potential customers.

Extended Testing and Analysis of Red Lake-5 and -7

Red Lake-5 was drilled to a total depth (TD) of 687 metres, with 36 metres of gassy coal intersected in the target coal seams, and Red Lake-7 reached TD at 501 metres with 62 metres of gassy coal intersected. These two wells will undergo further evaluation through flow testing and analysis for up to 90 days with flows expected to be primarily water. This will provide the necessary data around permeability that will be used in the design of the pilot program wells.

The equipment for the testing of Red Lake-5 and Red Lake-7 is currently being set up on site, with the test expected to commence in March 2023. The testing of these wells will provide important information regarding permeability of the coals to help the design of the upcoming pilot program later in the year.

Path to Commercialisation

The Company continues to identify a clear pathway to market for gas produced by Jade, with a number of commercial customers on Jade’s doorstep looking to secure future supplies of natural gas. Jade estimates that these future supplies will constitute more than 500 MW of future power demand, all within 200km of
the TTCBM Project, meaning that the domestic Mongolian market will likely be the only focus of any future gas sales.

Photo - see caption
Permit areas showing Red Lake Northern Extension drilling (red dots)

Commenting on the upcoming exploration drilling and extended testing and analysis, Jade Managing Director and CEO, Chris Jamieson, said:

'Off the back of a very successful 2022 campaign that delivered outstanding gas results and the largest gas resource in Mongolia at the time, we have established a significant footprint over 45km of gas field potential.

The initial four exploration wells at Red Lake will seek to expand our Contingent Resources to the north of the field. At the same time, we will be testing Red Lake-5 and Red Lake-7, which will provide us with vital information as we move forward with the pilot production program later in the year.

Jade Gas is focused on the important opportunity to support the clean energy transition within Mongolia and continues to be encouraged by both government and potential customers who acknowledge the important role that gas has to play in the domestic energy supply chain.'

About Jade Gas Holdings

Jade Gas Holdings is a gas exploration company focused on the coal bed methane (CBM) potential of Mongolia. Jade’s flagship project is the Coal Bed Methane gas project over the Production Sharing Agreement (PSA) area of Tavantolgoi XXXIII unconventional oil basin, (TTCBM Project).

Original article link

Source: Jade Gas





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