China Gengsheng Minerals, Inc. has signed a contract with the China National Offshore Oil Corporation (CNOOC), to supply 230 tons of fracture proppants to CNOOC's subsidiary, CNOOC Tianjin Zhongtai Huawei Industries Limited (CNOOC Tianjin), in Tianjin, China.
Fracture proppant is a light, bauxite-based, grain-like material that has a round and smooth surface and a quality of resisting high pressure and acid corrosion. It is used in oilfield drilling operations to release trapped pockets of oil and natural gas.
"We are excited that CNOOC again chose Gengsheng to supply this important yield-enhancing product," said Shunqing Zhang, chairman, CEO and president of Gengsheng. "As China's largest offshore oil producer, CNOOC made 12 new oil and gas discoveries and had 10 successful appraisals last year. This year CNOOC is targeting a 16% production increase. The high level of activity at Chinese national oil companies such as CNOOC forms a favorable macro environment for Gengsheng as we aim to substantially grow our fracture proppant business in 2008."
The Company will immediately ship fracture proppants to CNOOC Tianjin, in accordance with the terms of the contract.
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