Australia's Sino Gas & Energy Holdings Limited (Sino Gas, the Company) announced Monday the submission of its first Chinese Reserve Report (CRR) on the Linxing Production Sharing Contact (PSC) in China's Ordos Basin. The PSC operator, Sino Gas & Energy Limited (SGE), has also agreed a three year extension to the exploration period on the Linxing PSC with its partner, China United Coalbed Methane (CUCBM).
After being compiled by the CUCBM Research Centre, the CRR, which covers gas in the North-East portion of Linxing, has been submitted to be formally reviewed and ratified by both PSC partners at the next Joint Management Committee meeting, expected to be held in early 4Q 2013. CUCBM will then provide the report to the Chinese Ministry of Land & Resource (MOLAR) for approval.
Sino Gas’ Managing Director and CEO, Robert Bearden said “Preparing a CRR is the first step in a two-step regulatory process to develop gas assets into producing fields in China. After receiving CRR approval from MOLAR, we can then focus on preparing the Overall Development Plan (ODP) for full field development. The Operations team has worked extremely hard on completing our first CRR for submission and we look forward to the conclusion of the approval process early next year.”
As anticipated, SGE has signed a tenth modification agreement with Linxing PSC Partner CUCBM, which extends the exploration period of the Linxing Production Sharing Contract to August 2016 with no relinquishment of acreage or change to the PSC allocation structure.
Commenting on the signing of the agreement, Robert Bearden said “Sino Gas would like to express their appreciation for the cooperation and support of CUCBM in the exploration extension process and we look forward to continuing our strong working relationship to develop unconventional gas assets held under the Sino-Foreign PSC.”
“The modification agreement paves the way for the aggressive work program allowing Sino Gas to complete a full appraisal of the resource potential within the 724 square miles (1,874 square kilometers) block and prepare development plans for ODP approval. The work program will also include the commencement of the pilot production program under the gas sales agreement signed in June 2013,” Bearden added.
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