Major Success as First Production Well Flows Gas

Jade Gas Holdings

Highlights

• Major success confirmed by gas flow to surface at Jade’s first production well
  
  
• Marks a major de-risking milestone for establishing a commercial gas operation
  
  
• Provides the foundation for proof of concept and for completion of study work that will outline the scale of the full field development plan once flow rate data is confirmed
  
  
• The second production well is performing to expectations with gas flow expected shortly
  
  
• Jade continues to progress a number of commercial initiatives to take advantage of its pathway to become a significant gas operator in Mongolia.

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Jade Gas Holdings Limited (ASX:JGH) (Jade or the Company) is pleased to announce that it has achieved a material outcome with gas flow from its first horizontal production well, marking a critical milestone achievement for the Company, and a first of its kind for Mongolia in the development of the Tavantolgoi CBM Project (the Project).

Brought on-line on 9 June 2025 (see ASX announcement 10 June 2025), the dewatering process has been carefully managed, limiting daily fluid level drops to ensure the well bore remained stable. After 56 days of removing water from the coal, gas pressure has developed in the RL-Hz-001 casing, signifying commencement of gas production from the coal. As part of good operating practices, the casing gas was flared to assist with further reducing the bottom hole pressure and on-going dewatering.

Over the coming weeks further gas flaring and water pump rate adjustments will be made to achieve stable continuous production. This deliberate gentle reduction of the pressure in the coal is to minimise damage to the well and maximise the peak rate that is expected to develop over this period. Jade’s fully integrated services drilling contractor, DWK, leveraged its vast experience with production wells of this type in China’s Qinshui Basin, to deliver gas to surface for Jade within the expected period. The geological similarities of the
fields, indicate the possibility that the broader field development should occur at similar speed and scale.

This milestone significantly de-risks the Project with gas flow breakthrough demonstrating the Company’s ability to extract gas from the coal seams in the Red Lake Field. It advances the Project’s operational readiness ahead of compelling study work, including the Plan for Development and Operations (PDO), or field development plan, which is anticipated to be finalised once sustained gas flow rates are established above minimum commercial limits. The study work outlines the potential scale of planned operations, reinforcing Jade’s intent to establish the Red Lake project as the first commercial gas operation in Mongolia.

Importantly, this milestone, a first of its kind in Mongolia, also confirms proof of concept, in that the Company believes that the Red Lake gas field has the capacity to produce gas to support a scaleable and significant LNG operation.

Commenting on the gas flow milestone, Jade Non-Executive Director, Dr. Ian Wang, said:

“With the well type now proven for gas flow, we plan to replicate this throughout the Red Lake Gas field to deliver a long-term, significant supply of gas to the region. Our field development plan is substantially completed and will be ready for execution once gas flow data from the first two production wells is known in the coming weeks. Further to this, the gas flow data collected will also enable a reserve booking at Red Lake and complete our regulatory requirements for the Plan for Development and Operations (PDO).

This milestone now sets our pathway for Jade to become a significant gas operator in Mongolia, and with demand growing in large customer markets on our doorstep, we are building that momentum at the right time.”

Figure 1: Gas flaring of well RL-Hz-01 confirming proof of concept for the Project

Next Steps

The Company will complete gas flow rate measurements and further reservoir evaluation at the first production well RL-Hz-001. The second horizontal production well RL-Hz-02 continues to perform to expectations and gas flow from this well is expected shortly which will offer additional data to support to the Company’s horizontal production well development plan and gas delivery volumetrics.

Once gas flow rates are known across both wells, the field development plan (PDO) will be finalised. The PDO plans a staged development with low upfront capex and optimised production outcomes.

Concurrently, Jade also continues to progress a number of other initiatives focused on maximising value including partner discussions for fast tracking meaningful production and cashflows, project debt options, and a dual listing on Hong Kong Stock Exchange leveraging existing valuations secured by Mongolian natural resources companies.

Link to ASX Release:  https://bit.ly/3JclTLN

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Media and Investor inquiries:

Elvis Jurcevic
Investor Relations
[email protected]

Chris Whiteman
Interim CEO
[email protected]