Totally visible, gassy cores out of Red Lake-1 are a big positive for Jade Gas

The very first coal seam gas exploration well has thrilled the Jade Gas team after gas was clearly observed coming off the recovered core.

Here’s why the finding from the first of three targeted coal seams at Red Lake-1 has the whiff of a huge result for the company.

Methane: the smell of success

Successful coal seam gas is all about finding gassy coals, where methane gas is readily emitted from the targeted coals.

Ergo sum, for Jade Gas (ASX:JGH) to clock visible gas emitted from the core at seam IV is a solid sign its prospective resource (some one trillion cubic feet at the TT CBM project) in the South Gobi Basin could provide, in the long term, a reliable supply option to the power sector in Mongolia, both to the capital city of Ulaanbaatar and also into regional areas.

Red Lake-1 targets the IV, III and 0 coal seams and is currently drilling ahead at a depth of 742m with the first target, seam IV, intersected at a depth of 728m.

Once drilling is done, the complete evaluation program will include:

permeability testing (to assess the ease with which fluids flow through the coals)
wireline logging
isotherm analysis (both aid gas saturation measurements)
desorption
coal proximate analysis and permeability assessment

The totally assessed package

“We are delighted with the drilling progress being made at Red Lake-1, the first well in our recently announced six well Red Lake appraisal program,” chief executive officer Chris Jamieson said.

“Pleasingly, we have hit the first of our three coal seam targets, with visible gas coming off the core recovered from the well in seam IV.

“We anticipate being in a position to communicate initial gas observations and target coal seam thickness from Red Lake-1 early in the new year, which ideally will be coupled with the spudding of the second well in the program, Red Lake-2.”

Once drilling at Red Lake-1 is completed, the rig will be mobilised to drill the Red Lake-2 well about 1.6km to the southeast in early January 2022.

Coal seam gas drilling

Red Lake-1 is just the first in a current six-well program targeting the three coal seams to extend the area of investigation, validate gas content, evaluate gas saturation and measure coal seam permeability.

Four of the wells will be cased for extended production testing and monitoring in 2022.

This article was developed in collaboration with Jade Gas, 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.