Two Rigs Now Drilling at Red Lake

Source: 2/1/2022, Location: Asia

? Red Lake-3 spudded and drilling ahead at 457 metres
? Red Lake-4 spudded and drilling ahead at 11 metres
? Coal seams of interest to be targeted at depths of between 600 metres to 900 metres
? Red Lake-1 post-drill test work ongoing

Jade Gas Holdings is pleased to announce that two rigs are now operational and the second and third wells in its six well drilling program, Red Lake-3 and Red Lake-4, have spudded.

These wells are part of the six well program at the Company’s coal bed methane gas project over the Production Sharing Agreement area of the Tavantolgoi XXXIII unconventional oil basin in Mongolia (TTCBM Project).

Jade is targeting natural gas from three coal seams of interest (IV, III and 0) across the central core area of the permit, which has an independently assessed Prospective Resource of 1.0 Tcf1 of gas.

Red Lake-3
Red Lake-3 is the second well in the program and was spudded on 21 January 2022 and currently drilling ahead at a depth of 457 metres. Red Lake-3 is located approximately three kilometres west of Red Lake-1 (see location in figure 1) and will be cored and comprehensively evaluated through the target coal seams.

The coal seams of interest are expected to be intersected at depths of between 600 to 700 metres, with total depth expected at around 730 metres. It is anticipated that Red Lake-3 will take four weeks to drill.

Red Lake-4
The decision was made to drill the deeper Red Lake-4 well ahead of Red Lake-2 to provide the best chance for continuous drilling over the coming months due to casing delivery delays related to Chinese border restrictions ahead of the Winter Olympics.

Red Lake-4 is the third well in Jade’s six-well program and is located approximately 1.5 kilometres southeast of Red Lake-1. The well spudded on 31 January 2022 and will be cored to a depth of around 1,000 metres with an evaluation program consistent with Red Lake-1 and Red Lake-3. The coal seams of interest are expected to be intersected at around 700 to 900 metres depth.

Red Lake-1 test work ongoing
Red Lake-1 reached total depth of 1,012 metres, with all the three coal seams of interest intersected and cored between 730 metres and 970 metres depth. The extensive coring program delivered a total of 145 metres of coal, 58 metres of which had gas coming off the recovered core.

The complete evaluation program for Red Lake-1 is underway and includes:
• Gas desorption, to assess gas content;
• Permeability testing, to identify the ease with which fluids flow through the coals; and
• Isotherm analysis, to assess gas saturation.

Three Drill Stem Tests (DST) were conducted over the main seams of interest in Red Lake-1 and the results are being analysed, along with results from the Borehole Magnetic Resonance logging tool. These results, combined with the outcomes from the extensive evaluation planned in each of Red Lake -2, -3 and -4, will be used to build an understanding of the deliverability potential across the central core area of the TTCBM Project.

Authorised for release on behalf of the Board by Joseph Burke, Executive Director.

Gulf Oil and Gas
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