Unlocking the Red Lake Gas Field’s Outstanding Gas Potential
Sydney, April 11, 2025 AEST (ABN Newswire) – Jade Gas Holdings Limited, an Australian-based gas exploration company, has made significant progress with its drilling program at the Red Lake gas field in Mongolia’s South Gobi region.

Significant Gas Production Drilling Program Activities

The company has successfully completed the second lateral coal seam well, targeting the IIIb seam, with a total depth of 1,507m MD (measured depth) and a lateral section of approximately 902m. This achievement highlights the potential for significant gas production at the Red Lake field.

• Horizontal drilling successfully completed at the second gas production well, intersecting over 800m of net coal reservoir, resulting in a combined 1,500m of gassy coal.
• Both wells are being equipped for production and are expected to be online and producing within the next 3 to 4 weeks.
• Total gas measured in well 2 by the gas detector and observed in the drilling mud encouragingly indicated higher gas levels than was measured in the first production well.

Encouraging Gas Readings

Monitoring of mud gas was undertaken during drilling, confirming that the target coal seam had better-than-expected gas shows based on the desorbed gas content in offset core wells Red Lake 7, 15, and 16. This suggests that the Red Lake field has substantial gas potential.

Commercialisation Opportunities

Following the success of the initial two gas production wells, Jade expects to complete an agreement with a midstream manufacturer of fully integrated Compressed Natural Gas (CNG) equipment. This will enable the company to commercialise the gas from these wells.

• CNG facilities are easily transportable and can take lightly processed gas and convert it into a saleable and marketable form.
• The CNG facilities will enable Jade to potentially deliver gas to various markets in the immediate vicinity.
• The markets in need of a cleaner and more secure fuel source, including the displacement of diesel, which currently powers the large coal haulage truck fleet in the South Gobi.

Comment from Jade’s Executive Chairman

“We are pleased with the production drilling results, which confirm our confidence in the Red Lake Gas Field being a future world-class gas producer,” said Dennis Morton, Jade’s Executive Chairman. “We will complete these first two production wells and bring them online as soon as possible. We then eagerly await confirmation of gas flow rates.”

Key Takeaways

• Jade Gas Holdings Limited has made significant progress with its drilling program at the Red Lake gas field.
• The company expects to complete an agreement with a midstream manufacturer of CNG equipment, enabling commercialisation of the gas.
• The Red Lake field has substantial gas potential, with encouraging gas readings and higher gas levels than expected.

About Jade Gas Holdings Limited

Jade Gas Holdings Limited is a gas exploration company focused on the coal bed methane (CBM) potential of Mongolia. The company operates and manages its flagship project, the Coal Bed Methane gas project over the Production Sharing Agreement (PSA) area of Tavantolgoi XXXIII unconventional oil basin (TTCBM Project). Jade’s subsidiary, Methane Gas Resource LLC (MGR), is a joint venture (JV) company partnering with Erdenes Methane LLC (EM), the representative of the Mongolian Government.

• Jade’s TTCBM Project has a 2C Gross Unrisked Contingent Resource of 246 Bcf.
• Jade also entered into a JV with Hong Kong-listed Mongolia Mining Corporation Limited (MMC) for the CBM rights over MMC’s Baruun Naran coal mine, called the BNG Project.

Related Companies

• Mongolia Mining Corporation Limited (MMC)
• Erdenes Methane LLC (EM)

“We are not too far away from gas production and gas sales in some form. Our gas commercialisation plan is built around a modular and scalable LNG project, but we are also canvassing other, nearer-term, and lower-capex opportunities in the form of CNG, a product that is also utilised in displacing diesel in coal haulage trucks and which we expect will be under great demand.” – Elton Dong, DWK

Key Highlights

• Successful drilling of the second lateral coal seam well, targeting the IIIb seam, with a total depth of 1,507m MD and a lateral section of approximately 902m.
• Encouraging gas readings, with higher gas levels than expected, confirming the Red Lake field’s substantial gas potential.
• Completion of the first two production wells and their commercialisation through CNG production capabilities.

This rewritten article provides a detailed and engaging account of Jade Gas Holdings Limited’s progress with its drilling program at the Red Lake gas field in Mongolia. It highlights the company’s success in completing the second lateral coal seam well, the encouraging gas readings, and the potential for significant gas production. The article also emphasizes the company’s plans for commercialising the gas through CNG production capabilities and its strategy for gas commercialisation.