Sino Gas & Energy Holdings Limited (Sino Gas, the Company), announced Thursday that RISC Operations Pty Ltd (RISC), an Australian based, internationally recognised independent petroleum advisory, evaluation and valuation group, has completed an assessment of the Reserves and Resources for Sino Gas’ Production Sharing Contracts (PSCs) in the Ordos Basin, China.
Total project 2P Reserves have increased 168 percent to 877 billion cubic feet (Bcf), up from the 327 Bcf assessed by RISC in March 2013. RISC has recognized the significant progress made on the project during 2013, including the commencement of the field development process, progression on government approvals, and results from the aggressive drilling program.
Total project 2C Contingent Resources increased 10 percent, from 2.2 to 2.5 trillion cubic feet (Tcf), while total project P50 Prospective Resources increased by 64 percent, from 3.2 to 5.2 Tcf. The increase was driven by step-out drilling that increased the area of contingent resources and the extensive seismic programs which almost doubled the percentage of acreage classified as prospective from approximately 22 percent to 39 percent of the total (1,158.3 square miles (3,000 square kilometers). As a result 70 percent of the acreage has resources assigned, with the remaining under-explored 30 percent also having the potential for further upside.
RISC’s independent economic valuation of Sino Gas’ share of the project's Expected Monetary Value (EMV), has increased by 51 percent, from $1.6 to $2.4 billion.
Commenting on the outcomes of the Company’s second substantial Reserves and Resources upgrade in 2013, Sino Gas’ Managing Director and CEO, Robert Bearden said he was pleased with the size of the Reserves upgrade and praised the operations team for the commencement of pilot program preparations and the swift execution of the extensive drilling and seismic programs during 2013.
“RISC was requested to undertake this assessment due to the significant amount of work completed already this year. Routine Reserves and Resource assessments will be conducted on an annual basis, with the next assessment scheduled for 1Q 2014, in which additional Reserves and Resources upgrades are anticipated based on continuing drilling success.”
“Over $550 million in net present value has already been assigned to Sino Gas for the Reserves booked to date and we look forward to continuing the reserve maturation process to drive future project value. Additionally, a large increase in the Prospective Resources provides a basis for further maturation as our work programs intensify in 2014.” Bearden added.
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