Jade Gas Reports Strong Gas Potential from Mongolian Production Well

Key Takeaways:

• Jade Gas (ASX:JGH) successfully drilled its first horizontal production well in Mongolia.

• Significant gas levels recorded, with high methane (CH4) composition indicating strong production potential.

• Company remains on track for first commercial gas production by mid-2025.

Jade Gas has reported encouraging results from its first gas production well at the Red Lake gas field in Mongolia, marking a key milestone in its development program.

Recent discoveries in Mongolia have sparked interest in developing domestic energy sources to reduce reliance on imports and support industrial growth.

The well, which reached a total measured depth of 1,567 meters with a lateral section of 711 meters in coal seam IIIb, has reportedly demonstrated substantial gas potential.

Gas detectors recorded significant gas volumes during drilling, and visible gas was observed in the mud returns. Notably, the methane concentration was high, a strong indicator of commercial gas extraction potential. This result aligns with prior data from offset core wells, reinforcing confidence in the field’s gas reserves.

Jade's Executive Chairman, Dennis Morton, commented buoyantly in the announcement, "The results from the drilling have been extremely pleasing from a future gas production perspective. We were confident on achieving good gas content indications, which we have seen in abundance throughout the seam."

Commercial Production Timeline Remains Intact

The company expects to complete the second production well in April, with both wells set for pumping and production equipment installation at that time Jade is targeting mid-2025 for first commercial gas production, a timeline that remains on track following these drilling results.

Jade’s gas production strategy is focused on supplying cleaner energy solutions in Mongolia, which currently relies heavily on coal and imported fuels. The company sees significant long-term demand for domestically sourced gas to support the country's energy transition.

Other Jade Gas Projects

Beyond the Red Lake gas field, Jade Gas is also advancing the Baruun Naran Gas Project in partnership with Mongolia Mining Corporation, exploring commercial gas potential adjacent to an operating coal mine. Additionally, the company holds two prospective CBM permits, Shivee Gobi and Eastern Gobi, covering over 18,000 km² in Mongolia.