Highlights
• Gas production rates continue to increase month-on-month
• Total gas production for the month increased by 19% over the previous month
• Field Development Plan (PDO) and the Economic Study progressing positively
Jade Gas Holdings Limited (Jade or the Company) is pleased to provide the monthly operations
update on production activities at the Red Lake Gas Field in the South Gobi region of Mongolia.
Operations Summary
During the month of October, both horizontal wells in the Red Lake field (RL-Hz-01 and RL-Hz-02) continued
to be dewatered with the fluid level now close to minimum operational levels for pumping operations. Gas
flow rates continued to increase during the month. The relative increase in production (+19%), is lower than
the previous month increase, but in line with DWK’s (Jade’s drilling contractor) expectations, and accounts
for the September period of production (30 days for each well) being compared to the month of August
during which gas was not flowing for the entire month (RL-Hz-01 recorded gas flow for 14 days and RL-Hz02 recorded gas flows for 11 days).
The Company, in conjunction with the experience of DWK, continues to monitor and manage the water
production as a key influential factor in the gas flow performance. To avoid damage to the well, it is
important not to draw down water too hastily, and to allow gas flow rates to stabilise following adjustments
to water production rates. During the month, adjustments were made with positive response from the
reservoir.
The priority remains confirming longer term sustainable flow rates to enable completion of the Field
Development Plan (PDO) and Economic Study. In addition to the PDO and Economic Study, an appraisal
report, and a resource and reserve evaluation will also be completed and submitted to the Mongolian
regulator for review and approval.
Commenting on the progress this month, Jade Non-Executive Director, Dr Ian Wang, said:
“We are pleased with the ongoing increase in gas flow rates observed over the month. In-line with our well
management plan, we continue to monitor and adjust water production rates in order to get to the
sustainable flow rates we are expecting. So far, the reservoir is responding to our initiatives very positively.
We remain focused on achieving commercial flow rates from the initial production wells, and finalising
the Field Development Plan and Economic Study, which are expected to demonstrate a highly compelling,
long life gas project.”
1. Production Metrics
Water produced from both wells is trucked to the nearby Tavan Tolgoi coal mine (operated by Erdenes Tavan
Tolgoi) for beneficial use in their operations.
2. Reservoir and Technical Progress
• Operating Philosophy: The wells are being operated in line with best-practice operations for lateral
wells in the Qinshui Basin in China, the analogue field for Red Lake.
3. Well and Drilling Activities
• RL001-3b-Hz-01 was fully operational during the month of October with 99.5% uptime
• RL001-3b-Hz-02 was fully operational during the month of October with 99.9% uptime
4. Forward Outlook
a. Upcoming Activities: Pumping operations will continue to remove water in order to maintain the
lowest possible flowing bottom-hole pressure. Once commercial flow rates are reached the appraisal
plan and resource and reserve estimate for the Mongolian regulator can be completed which will
inform the finalisation of the full field development (Plan for Development and Operations).
b. Additional Seismic: The need for additional 2D or 3D seismic surveys to be conducted over part of
the Red Lake field during 2H 2025 remains under consideration. The mine operator’s (Erdenes Tavan
Tolgoi JSC) corehole program in the area is set to commence in the short term, and data shared under
the Co-operation Agreement with ETT will further assist the team in the understanding of seam
correlation, which will inform the requirement and/or design of a seismic acquisition plan for 2026.
c. Infrastructure: The assessment of appropriate longer term production infrastructure requirements
is ongoing. The Company has met with several providers of mid-stream gas processing and
liquefaction equipment which is suitable for the Red Lake field development. Studies in this area are
intended to inform overall production and processing costs, which form part of the economic
assessment.
Authorised for release by the Board of Jade Gas Holdings Ltd.