Highlights
• Gas production rates continue to increase month-on-month
• Total gas production for the month increased 18% over the previous month
• Aggregate flow rate at the end of the month 1,696m3
- a 10% increase above the
average daily rate
• Flow rates now approaching sufficient volume to enable displacement of diesel fuel
powering site operations
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Jade Gas Holdings Limited (Jade or the Company) is pleased to provide its monthly operations
update on gas production activities at the Red Lake Gas Field in the South Gobi region of Mongolia.
Operations Summary
During the month of November, both horizontal wells in the Red Lake field (RL-Hz-01 and RL-Hz-02)
continued to be dewatered and at the end of the month fluid level in the wells was within 2 to 9 metres of
the pressure gauge which sits immediately above the pump. The wells will continue to be pumped at rates
to maintain this fluid level as near as possible to the pump. As a result, the gas flow rate has continued to
increase during the month, and water flow rates are declining.
At the end of the month, measurements recorded an aggregate flow of 1,693m3
, representing an increase
of 10% on the average daily gas production for the month of November. Flow rates are now reaching a
point where the gas produced from the wells can be utilised at site to power operations effectively displacing
imported diesel consumption.
The priority remains confirming longer term sustainable flow rates to enable completion of the Field
Development Plan (PDO) and an 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 MD and CEO Chris Newport, said:
“We are pleased with the ongoing increase in gas flow rates over the month as the team continues to
optimise well operations to achieve sustained and higher gas production.
We expect the production wells to achieve planned economic threshold of ~2,500m3 per day in the coming
months. This will allow the Company to complete its Plan for Development and Operations, the booking
of first reserves, and support ongoing discussions with customer markets.”
Experienced Production Contractor DWK, added
“The dewatering process has been progressing very well and in line with our expectations based on
extensive experience in the Qinshui Basin in China. The water production rates at both wells are stable
with casing pressure well maintained. This has allowed the gas rate to increase as expected and the flow
rates are now approaching the point where we can cease the flaring of the gas from the wells and use this
gas to displace the usage of diesel for site operations. This is common practice at CBM projects across
China and it supports our belief that the TTCBM Project will be an important source of power generation
for Mongolia.”
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 November with 100% uptime
• RL001-3b-Hz-02 was fully operational during the month of November with 100% uptime
• Preparation commenced for lateral drilling in 2026
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 for reserves.
Authorised for release by the Board of Jade Gas Holdings Ltd