📋 Tender Overview
Scope: to develop Jade’s Red Lake gas resource.
Jade Gas Holdings recently appointed DWK as its integrated services contractor as part of its strategy to expedite resource development and accelerate the path to gas production. During the well design and planning phase with DWK for the initial four production wells at Red Lake, it became clear that DWK not only grasped the technical requirements but also shared Jade’s perspective on the commercial value of the Red Lake gas field.
An opportunity to expand the engagement emerged, leading the Partnership to aim for the rapid development of the next 20 production wells at Red Lake. This plan is contingent on the successful drilling of the initial four production wells, set to begin soon, and regulatory approval. The agreement will have DWK committing to fund the capital necessary for drilling and commissioning these 20 wells, in exchange for a share of the gas revenue generated from them.
Given DWK's expertise in coal bed methane production wells in the Qinshui Basin, the Company recognizes the parallels between the recent rapid development at Qinshui and Jade's Red Lake project. This similarity is a primary factor fueling DWK's confidence in replicating that success at Red Lake.
The agreement covers only a small portion of the initial phase of a plan for 175 wells at Red Lake, with subsequent phases subject to approval by MRPAM.
The Red Lake area contains substantial Gross Contingent Resources estimated at 1C / 118 Bcf, 2C / 246 Bcf, and 3C / 305 Bcf, marking the largest Contingent Resources for coal bed methane in Mongolia at the time of assessment. Alongside the imminent launch of the initial 4-well production program, Jade anticipates completing an additional 171 production wells in the subsequent phase of Red Lake development.
