Jade Gas confirms highly successful well, reaching a depth of 1,012 metres, and intersecting 58 metres of gas bearing coal.

Jade Gas Holdings reached its total depth at Red Lake-1, the first of six wells to be drilled at the company’s Tavan Tolgoi coal bed methane gas project in Mongolia’s South Gobi desert.

The extensive coring program in the Red Lake-1 well delivered a total of 145 metres of coal, 58 metres of which had gas coming off the recovered core.

This was an outstanding result and dwarfs not just other coal bed methane wells drilled in Mongolia to date, but is significantly thicker than what is seen in the prolific LNG supplying Bowen and Surat basins in Queensland.

Jade Gas (ASX:JGH) says drilling will improve the company’s understanding of the central core area of its permit, which has an associated prospective resource of 1.0 Tcf of gas.

While the result did not surprise the team at Jade Gas, it certainly outperformed initial expectations, and has resulted in a second drilling contractor being introduced to fast track the six well program.

Exceeded all expectations

JHG chief executive officer Chris Jamieson said the drilling exceeded expectations, especially in terms of thickness.

“Further testing is required to better understand the gas content, permeability and saturation of the target coal seams, the results from which will be gathered over the coming months.

“These strong results from Red Lake-1 have driven our push to expedite the program, and to this end we have engaged a second drilling company, which will drill two of the six wells planned in this important drilling campaign.”

Next on the agenda

Core sampling and drilling data collection was completed at the company’s on-site mobile lab operation.

The complete evaluation program for Red Lake-3 is underway and will build an understanding of which coal seams may be targeted for commercial production.

Activities include:

  • Gas desorption, to assess gas content and expected to be completed over the coming weeks;
  • Permeability testing to identify the ease which fluids flow through the coals; and
  • Isotherm analysis, to assess gas saturation. The isotherm analysis will require specialist laboratory testing and as a result is expected to be completed around three months after the conclusion of desorption testing.

At its Red Lake-2 well, Jade says drilling is expected to reach total depth at around 800 metres, with drilling to take around four weeks.

All wells in this program will continue to target the three coal seams of interest, those being IV, III and 0.

The third well of the program, Red Lake-3 is around 1.3 kilometres southwest of Red Lake-2 and will spud over the coming weeks.

Red Lake-3 will be extensively cored and is expected to reach TD at around 730 metres, with drilling to take place over a three-to-four-week period.




This article was developed in collaboration with Jade Gas Holdings , 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.