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Highlights

  • Second lateral well at Red Lake confirms significant gas presence.

  • 802m of net coal intersected in target seam IIIb.

  • Production testing to begin shortly.

  • CNG partnership in the works to enable near-term commercialisation.

Jade Gas Holdings Limited (ASX:JGH) shares soared by 30% on Friday morning, trading at 4.3 cents, after the company announced significant progress in its gas production drilling program at the Red Lake gas field in Mongolia’s South Gobi region.

Encouraging Results from Second Lateral Well

Jade successfully completed drilling its second lateral coal seam well, which intersected 802 metres of net coal in the targeted seam IIIb—representing an impressive 88.9% net coal pay. The well reached a total measured depth (MD) of 1,507 metres, with a 902-metre lateral section.

Throughout the drilling process, significant gas readings were recorded both on detectors and visibly in mud returns, mirroring the positive results seen in the company’s first lateral well.

Mud gas monitoring confirmed that seam IIIb yielded better-than-expected gas shows compared to data from offset core wells Red Lake 7, 15, and 16.

The well is being cased using a 5½-inch pre-drilled liner with a staged cementing tool, and a packer positioned just above the entry point of the target seam.

Focus Shifts to Testing and Commercialisation

With the second well drilled, Jade is now preparing to complete and begin production testing on both lateral wells. Installation of pumps and production equipment is underway, after which water and gas flows will be analysed to further optimise development plans for the TTCBM field.

CNG Deal in the Pipeline

On the back of its drilling success, Jade expects to finalise an agreement with a midstream manufacturer for the supply of fully integrated Compressed Natural Gas (CNG) facilities. These mobile units will allow the company to process and sell gas directly from the field.

The easily deployable CNG units will enable Jade to supply cleaner fuel to nearby markets, including displacing diesel in the region’s coal haulage truck fleet — offering both environmental and logistical advantages.