Sino Gas Updates on Linxing PSC, China

September 6, 2012

Sino Gas & Energy Holdings Limited provided the following update on the work program for the Linxing (31.7%, Sino Gas) Production Sharing Contract (PSC), located in the Ordos Basin, Shanxi Province, People’s Republic of China.

Three drilling rigs are now on location with a fourth rig to be added in late September. The Linxing East seismic work program continues with over 40% of the 170km data acquisition program completed. The drilling program is on schedule and to date:

Well LXSG-09 was spudded on 21 August and will be drilled to a proposed total depth (TD) of 850 meters. The current drilling depth is 540 meters.
Well LXSG-05 was spudded on 25 August and has a proposed TD of 790 meters. The well’s current drilling depth is approximately 242 meters.
Well LXSG-02 is expected to be spudded on or around 9 September and will be drilled to a proposed TD of 1030 meters.
A fourth rig, which is en-route to the site, is expected to commence drilling of Well LXSG08 in late September. This well will be drilled to an estimated TD of 1020 meters.

The 2012 work program for Linxing East is comprised of a total of eight new wells, with an additional deep exploration well expected to be drilled following the analysis of seismic results. Each well is anticipated to take approximately 45 days to complete an extensive drilling and coring program.

After dewatering, each well will be flow tested for approximately 12 weeks. Seismic data gathered during the work program, along with drilling data and flow test results, will be used as inputs for a Chinese Reserve Report. Preparing a Chinese Reserve Report is the first step in a two-step regulatory process to develop coal bed methane assets into producing fields, culminating in the preparation of an Overall Development Plan approval for a PSC which leads to full field development.

Sino Gas’ Managing Director & CEO, Robert Bearden said: “Progress continues on field development at Linxing East and a substantial portion of the seismic program is now complete. In addition to the work at Linxing East, testing and drilling of two deep wells in Linxing West is also proposed. We are also advancing the planned LNG pilot program on Linxing West, and will provide another market update by month end.”

[mappress]
LNG World News Staff, September 06, 2012; Image: Sino Gas & Energy