Jade Gas Ignites First Wells, Secures A$3.6M Loan, Eyes Hong Kong Listing
Jade Gas Holdings has activated its inaugural gas production wells at Mongolia’s Red Lake field, marking a pivotal step toward commercial coal bed methane output. The company also secured a A$3.6 million loan and is exploring a dual listing on the Hong Kong Stock Exchange to accelerate growth.
- First two coal bed methane wells commenced stable dewatering and initial gas production expected this quarter
- A$3.6 million unsecured loan facility secured to support ongoing well production activities
- Advanced project study nearing completion to optimize capital expenditure and production strategy
- Preliminary partner discussions underway to fast-track gas sales and cash flow generation
- Dual listing on Hong Kong Stock Exchange contemplated to access Asian capital markets
Milestone Achieved with First Gas Production Wells
Jade Gas Holdings Limited (ASX – JGH) has reached a significant milestone with the commissioning of its first two coal bed methane (CBM) production wells at the Red Lake gas field in Mongolia’s South Gobi region. The company has initiated stable dewatering operations, a critical precursor to gas flow, with initial gas breakthrough anticipated within the current quarter. This development marks the first horizontal CBM gas production wells in Mongolia, positioning Jade as a pioneer in the country’s emerging gas industry.
The wells are being managed with a cautious drawdown approach to protect the coal seams, drawing on operational best practices from analogous fields in China’s Qinshui Basin. Early indications of substantial methane content and visible gas in mud returns underscore the promising resource potential.
Financial and Strategic Maneuvers to Support Growth
To underpin its production ramp-up, Jade secured an unsecured A$3.6 million loan facility from Executive Director Joseph Burke, providing additional financial flexibility for well production activities. Despite a modest cash balance of A$30,000 at quarter-end, the company maintains capacity for further capital raising if required.
Parallel to operational progress, Jade is finalizing a comprehensive project study aimed at optimizing capital expenditure and production outcomes for the Red Lake field. The study will inform the long-term Plan for Development and Operations (PDO), a regulatory requirement in Mongolia.
Partnerships and Market Expansion Prospects
Jade is actively engaging with potential partners to secure off-take agreements for liquefied natural gas (LNG), targeting both local and export markets. While discussions remain preliminary, the level of interest received is encouraging and aligns with the company’s strategy to replace diesel fuel with cleaner gas alternatives in the region’s heavy transport and power sectors.
In a strategic move to broaden its investor base and enhance liquidity, Jade is contemplating a dual listing on the Hong Kong Stock Exchange. This initiative leverages the geographic and economic proximity to China, a key market for natural gas, and aims to tap into Asian capital pools familiar with Mongolian natural resources.
Corporate Leadership and Governance Updates
Reflecting its transition to production, Jade appointed Chris Whiteman as Interim CEO, replacing Executive Chairman Dennis Morton who stepped down after guiding the company through its pilot production phase. The company is also considering further board renewals to bring in seasoned natural resources executives, including in-country appointments to support operational scale-up.
These leadership changes underscore Jade’s commitment to executing its commercial and development objectives effectively as it moves from exploration to production.
Bottom Line?
Jade Gas is now poised at the cusp of commercial gas production, with financial and strategic initiatives setting the stage for Mongolia’s evolving energy landscape.
Questions in the middle?
- How quickly will Jade’s gas flow rates ramp up to commercial levels following initial breakthrough?
- What terms and timelines will emerge from ongoing partner negotiations for LNG off-take agreements?
- How will the proposed Hong Kong dual listing impact Jade’s capital access and valuation?
