Fortune Garners Liulin CBM Rights

Fortune Oil PLC said that the Chinese Ministry of Commerce has approved the transfer of the foreign contractor rights in the Liulin block Production Sharing Contract (PSC) for coal bed methane (CBM) to Fortune Liulin Gas Co. Limited. In addition, the ministry has extended the PSC exploration period by two years.

Fortune Liulin Gas Co. Limited is to be owned 60 percent by Fortune Oil and 40 percent by Molopo Australia Limited. All central government approvals are now in place for Fortune Oil to begin a drilling program in order to commercialize the gas reserves in the Liulin block. The expenditure commitment for the company over the next year is US$2.5 million, which will be funded from existing cash resources.

According to Fortune, the Liulin block is one of the best geologically proven CBM blocks in China--with a potential plateau production of 0.5 billion cubic meters per year. Fortune Oil is building a professional CBM team and actively seeking other CBM opportunities in China.

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