Leyshon Energy Limited provided Tuesday the following update on the Company's activities. Following the successful completion of the demerger and the Company's Admission to AIM in January of this year the Company has undertaken a detailed review of the planned exploration and appraisal program of the Zijinshan gas project in Central China's Ordos Gas Basin and has actively progressed its interest in a number of acquisition opportunities in the region.
Zijinshan Gas Project - Commencement of Interim Testing Program
The Company has recently reached an agreement with its partner, which remains subject to the finalization of documentation, whereby it will undertake an interim testing program on the Zijinshan project before making a decision whether to commit to the main exploration and appraisal program.
The purpose of the interim testing program is to test the gas and water properties in wells ZJS5 and ZJS6, and to flow test well ZJS7. Depending on favorable results from the program it is planned to drill and flow test a further well, ZJS8, in a location in the northern part of the license area. The program is expected to commence shortly and will be completed by the end of August this year at an estimated cost of up to $3 million.
The $17 million main program is an exploration and appraisal program which comprises drilling, fracking and flow testing three wells with the remainder of the costs covering PSC maintenance and geological costs. The program, which may well be modified to reflect results, is designed to upgrade the existing resources such that a Chinese Reserve Report can be obtained.
Acquisition of Oil and Gas Assets in China
As previously advised the Company has been actively pursuing a number of acquisition and investment opportunities in the oil and gas sector in China.
There are a number of divestment processes underway for assets in the region for which the Company has made significant progress in advancing its interest in the normal course of business. A number of these discussions are in hand. There is no indication whether this will lead to a commercially binding transaction.
Chairman John Manzoni commented: “We are delighted to be able to recommence activities on the Zijinshan project and look forward to reporting results as they come to hand. We remain very active on the acquisition front and are pleased at the strong financial support we have received to date for the potential acquisitions we are working on.”
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