TIDMGDG
RNS Number : 6265S
Green Dragon Gas Ltd
04 October 2017
4th October 2017
GREEN DRAGON GAS LTD.
('Green Dragon' or the 'Company')
Green Dragon Executes Another Three Supplementary Agreements
Green Dragon Gas Ltd. (LSE: GDG), one of the largest independent
companies involved in the production and sale of coal bed methane
(CBM) gas in China, is pleased to announce its wholly owned
subsidiary Greka Energy (International) B.V (Greka BV) has entered
into three Supplementary Agreements with China United Coalbed
Methane Corporation (CUCBM), a subsidiary of China National
Offshore Oil Corporation (CNOOC), regarding three Production
Sharing Contracts (PSC's) in China in the Shanxi, Anhui and Jiangxi
regions.
These Supplementary Agreements confirms that exploration can
commence across Fengcheng (GFC), Qinyuan (GQY) and Panxie East
(GPX) Blocks. This complements the previous announcement released
on 20(th) September 2017, which highlighted a Memorandum of
Understanding on five PSC's. Furthermore, it was announced that two
of the Supplementary Agreements on GSS and GSN PSC's were
concluded. These agreements together with GFC, GQY and GPX conclude
all five Supplementary Agreements.
Both Greka BV and CUCBM's priority is to maximise the value
within its exploration PSCs and these agreements ensures the
priority objective is expedited.
Highlights
-- The remaining three PSC's have been finalised
-- PSC exploration period extended to Q2 2019
-- Minimum work commitment for each PSC identified and confirmed
Mr. Randeep S. Grewal, Founder & Chairman of Green Dragon
Gas commented:
"These agreements conclude our five PSC's that have been in
question over the past eight years, ensuring a committed close
cooperation between CUCBM and Greka BV to unlock and monetise all
our lucrative prolific gas Blocks. The detail within these
Supplementary Agreements eliminates the ambiguity within the PSC's
and provides a transparent and clear road map to conclude the
exploration programme and progress to commerciality.
"We are committed to working closely with our partner CUCBM and
concluding material reserve progressions in all our prolific
Blocks. Both parties have significant experience of the Chinese CBM
commerciality potential. Pooling such knowledge is an optimum
partnership with collective rewards.
"Another milestone on our path to monetisation has been
concluded. We are committed to keeping the market informed and will
provide an update on further progress in the near term."
Fengcheng Supplementary Agreement (GFC Block)
1. Exploration period
The exploration period is extended to 14 April 2019
2. Minimum work commitment
a) Area (1227.7 km(2) ): Greka BV is the operator with 60% participating interest and CUCBM 40%
i) Phase one: Until 9 May 2018
-- Five vertical wells, two pairs of horizontal wells, total
footage of 10,200 metres and produce 2 wells
-- Total expenditure of US$7.07 million
ii) Phase two: 10 May 2018 to 14 April 2019
-- Drill one vertical well, one pair of horizontal wells, total
footage of 3,600 metres and file reserve report for certification
from nine wells
-- Total expenditure of US$1.84 million
Qinyuan Supplementary Agreement (GQY Block)
1. Exploration period
The exploration period is extended to 14 April 2019
2. Minimum work commitment
a) Area A (1694 km(2) ): CUCBM is the operator with 90% participating interest and Greka BV 10%.
i) Phase one: Until 8 September 2018
-- Perform 2D seismic work on 300 km, drill 14 vertical wells
and (or) directional wells, footage of 17,000 metres, and produce
five wells
-- Total expenditure of US$8.09 million
ii) Phase two: 9 September 2018 to 14 April 2019
-- Drill three vertical wells and (or) directional wells, total
footage of 3,900 metres, fracturing three wells and produce 19
wells
-- Total expenditure of US$2.54 million
b) Area B (1694 km(2) ): Greka BV is the operator with 60% participating interest and CUCBM 40%
i) Phase one: Until 8 September 2018
-- Drill five vertical wells, four pairs of horizontal wells,
total footage of 16,400 metres, and produce 10 wells
-- Total expenditure of US$9.12 million
ii) Phase two: 9 September 2018 to 14 April 2019
-- Drill three vertical wells, one pair of horizontal wells, and
total footage of 6,200 metres. File reserve report for
certification with production from 15 wells
-- Total expenditure of US$2.54 million
Panxie East Supplementary Agreement (GPX Block)
1. Exploration period
The exploration period is extended to 14 April 2019
2. Minimum work commitment
a) Area (590 km(2) ): Greka BV is the operator with 60% participating interest and CUCBM 40%
i) Phase one: Until 9 May 2018
-- Drill two vertical wells and one pair of horizontal wells,
total footage of 4,800 metres, and produce one well
-- Total expenditure of US$3.29 million
ii) Phase two: 10 May 2018 to 14 April 2019
-- Drill 1 pair of horizontal wells with total footage of 2,600
metres. File reserve report for certification from production of
four wells
-- Total expenditure of US$890,000
* Exchange rate used in conversion of RMB-USD is 6.50.
For further information on the Company and its activities,
please refer to the website at www.greendragongas.com or
contact:
FTI Consulting
Edward Westropp / Kim Camilleri / Elizabeth Burnham / Ntobeko
Chidavaenzi
Tel: +44 20 3727 1000
About Green Dragon Gas
Green Dragon Gas is a leading independent gas producer with
operations in China and is listed on the main market of the London
Stock Exchange (LSE: GDG). The Company has 559 Bcf of 2P reserves
and 2,386 Bcf of 3P reserves across eight production blocks
covering over 7,566 km(2) of license area in the Shanxi, Jiangxi,
Anhui and Guizhou provinces. It holds six Production Sharing
Agreements with strong, highly capitalised Chinese partners
including CUCBM (CNOOC), CNPC and PetroChina, and has
infrastructure in place to support multiple routes to monetise gas
production.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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