A 2P reserve of 316 million cubic metres unlocks the production licence pathway and reframes the funding story
Jade Gas (ASX:JGH) has done something no other company has managed in Mongolia. The Mongolian Minerals Reserves Council has approved the country’s first ever booking of natural gas reserves, and they belong to Jade.

The headline number is a 2P gross recoverable gas reserve of 316 million standard cubic metres, with 165 million attributable to Jade after its 60% interest in the operating JV. The 3P figure runs to 793 million gross. These are not enormous volumes by global standards, but they are a regulatory first, and that is what matters here.

The reserve booking is the gate that unlocks the next two steps. Jade can now lodge its Plan for Development and Operations, then apply for an Exploitation Licence.

What is easy to miss is how small a slice of the project this covers. The 2P reserve sits on just 4.2 square kilometres of the 60 square kilometre Red Lake Field, and only one of six to seven known gassy coal seams. The rest sits in contingent and prospective resources, waiting for the drill bit.

Why a first-ever reserve booking is more than a press release line
Mongolia has never had a domestic gas reserve booked under its own regulatory framework. Jade is the trailblazer, and that means the Mongolian Minerals Council has now established a working pathway for coal seam gas approvals. For Jade, that removes a layer of regulatory ambiguity that has hung over the TTCBM project since the appraisal program began.

The reserve booking is classified as Justified for Development under PRMS 2018. That language matters because it signals the regulator and the qualified evaluator both agree the 40-well initial development has a commercial threshold worth pursuing.

Worth noting, the 1P reserve is reported as zero. That reflects the fact that the low-side production case does not cover the capital cost of the initial LNG modules, which is normal for a small-scale, first-of-kind development. The 2P case carries the economics.

The funding picture just got materially easier to pitch
Jade flagged a letter of intent for A$70 million in project funding back in November last year, plus a non-binding agreement with drilling contractor DWK to drill 20 wells. Neither of those was going to convert without a reserve booking on the table.

A binding gas sales agreement with UB Methane LLC for LNG offtake was signed in September last year, with the product positioned as a diesel replacement for Mongolia’s heavy transport sector. Combined with today’s approval, the bankability narrative gets considerably tighter.

We think the next six to twelve months will tell us whether the company can convert this regulatory milestone into a hard funding package. Drilling of development wells is planned to commence in 2027.

The contingent resource story is where the optionality really sits
The 4.2 square kilometre reserve area is a fraction of the broader resource base. Gross contingent resources sit at 1,372 million cubic metres at 1C, rising to 11,097 million at 3C across the wider Red Lake Field.

Our take is that the reserve booking is the proof point, not the prize. The real value lever for shareholders is the migration of contingent resources into 2P and 3P categories as drilling extends across the other gassy seams.

That said, execution risk is real. Coal seam gas development is capital-intensive, and the LNG modules carry roughly 100% freight, installation and commissioning costs on top of the manufacture price.

The Investors Takeaway for Jade Gas
The reserve booking is a genuine de-risking event, and one that no other ASX-listed Mongolia gas play has managed. The question now is execution. The PDO submission, the Exploitation Licence application, and the conversion of the A$70 million funding letter of intent into binding capital are the three milestones that matter between now and the planned 2027 drilling start.

Investors can find our prior coverage of Jade, including our interview with MD Chris Jamieson, at stocksdownunder. If management can string those three milestones together inside the next twelve months, the contingent resource conversion story moves from theoretical to investable.

Published Date:2026-06-01