Jade Gas Holdings (ASX:JGH) has highlighted the ‘massive’ potential for commercial-scale gas production at the Baruun Naran-3 (BNG-3) permit area in Mongolia after confirming its second-largest gassy coal intersection in a single well.
The $56.76 million market capitalisation company says it has intersected up to 104.6m of gassy coal in Baruun Naran-3.
According to Jade Gas, the intercept reached a total depth of 849.8m, with multiple gassy coal seams intersected including the last seam, which was recorded as being 28.5m thick.
The coals are currently undergoing desorption testing.
Jade Gas states the results highlight the potential for commercial-scale gas production within its established 40km gas field across the Tavantolgoi XXXIII unconventional oil basin (TTCBM) and Baruun Naran (BNG) projects.
The company reports it intends to accelerate the path to securing a production sharing agreement (PSA) and for the conversion of 2U prospective resources to 2C contingent resources in the BNG permit.
Executive Chairman Dennis Morton says the results, alongside ongoing progress on development concepts for coal bed methane (CBM) in the area, provide the company with confidence in potentially adding further value by achieving a contingent resource and PSA over BNG in 2024.
Jade Gas currently holds a prospecting agreement permit over the BNG Project with joint venture (JV) partner Khangad Exploration, a subsidiary of Mongolia Mining Corporation (HKG:0975).
The BNG project sits immediately adjacent and west of Jade’s TTCBM Project and has an active coal mine within it, as well as ‘substantial’ data gathered from historic coal mine drilling.
The company has identified BNG as a critical area for expedited drilling as part of its CY24 plans.
Jade Gas is a gas explorer actively operating in Mongolia.
As of 30 September 2023, Jade Gas had $2.968 million cash and cash equivalents at hand, according to its latest quarterly report.
Images: Jade Gas