Jade Gas Holdings to advise that it has stepped up its drilling activity in the South Gobi region of Mongolia, with four rigs drilling production and exploration wells at the TTCBM Project and the recently acquired Baruun Naran permit. Jade is targeting natural gas from three coal seams of interest - IV, III and 0 - across the prospective areas within its TTCBM Project permit, with Gross Contingent Resources recently booked for the Red Lake area within the permit of 1C: 118 Bcf, 2C: 246 Bcf and 3C: 305 Bcf1 of gas. The first of the two Baruun Naran wells, BNG-1, spudded on 24 October and reached a measured depth of 463 metres.

The well has been logged and is currently undergoing drill stem testing. The BNG wells are targeting shallow coals at depths of between 150 and 350 metres, with BNG-1 recovering 35 metres of gassy coal, which is currently being assessed. The BNG permit has an active coal mine within it, along with substantial data gathered from historic coal mine drilling.

From this data the company is locating wells in areas that the company is confident will extend the TTCBM play, and with the intersection of 35 metres of gassy coal, the gas fairway extends another 20 kilometres to the west, giving the company's CBM play a strike distance of approximately 35 kilometres. The exploration drilling in the east of the permit continues with the wild-cat exploration well Steppe-1, the third well in the TTCBM exploration program, which is currently at 797 metres. Steppe-1 is expected to reach total depth (TD) at around 900 metres.

Brownhill-1 was drilled to a depth of 523 metres, with the coal core currently being analysed and initial results from the coal core expected within the week. The TTCBM Project is ideally located with significant mines and other mineral deposits within 100 kilometres. It is estimated that over 500 MW of power will be required to meet the electricity needs for expected production from these operations over the coming years.

The TTCBM Project and BNG permit are well situated to take advantage of this boom in power demand as these producers, all of whom are increasingly aware of the global financial market's viewpoint on carbon intensive power usage, eagerly search for a cleaner source of energy to drive operations.