Sino Gas & Energy Holdings Limited (ASX:SEH), an Australian company developing unconventional gas assets within the Ordos Basin, Shanxi Province China, is pleased to confirm the commencement of its 2011 well testing program on the Linxing Production Sharing Contract (PSC).
Following a competitive tendering process, Sino Gas has now signed the 2011 testing contract for the Linxing PSC with CCDC Changqing (CCDC), a subsidiary of PetroChina (
NYSE:PTR) (HKG:0857) (SHA:601857). Sino Gas used CCDC extensively in its 2010 well testing campaign.
Sino Gas Managing Director, Stephen Lyons, said he was very pleased with the appointment of CCDC, which highlights our continued cooperation with established Chinese service companies.
"CCDC are a full service downhole company that performed safely and very effectively for Sino Gas in 2010 delivering 7 successful tests. They also had extensive input into the test program designs and this will continue during 2011.
The testing contract is initially for 2011 but can be extended with additional tests being added as required," said Mr Lyons.
Testing equipment will now be prepared and mobilised to the TB09 Gas Discovery Well for a test scheduled around the end of May 2011.
Prospective zone in TB09 to be stimulated
The TB09 Gas Discovery Well was drilled to TD late in Q4, 2010 with electronic wireline logging confirming the presence of gas in multiple zones.
The test to be carried out will be on one of the upper zones that exhibited promising log and core testing results and is expected to generate commercial gas flows that will be converted to CNG for transport and sale in the Company's Pilot.
As with Sino Gas's previous well tests, the TB09 test will initially involve a perforation of the zone followed by a flow test to measure gas flow and formation pressure data. Following the flow test it is intended that the zone will be hydraulically fracture stimulated to increase gas flow.
Assuming a successful test on TB09, the well will form part of the Company's Pilot development that is expected to include multiple wells during 2011 with gas sales increasing significantly as this program proceeds.
Other activities, including those on the Sanjiaobei PSC, will be confirmed as they are approved and scheduled.
Patersons Research - "Q1, 2011 Update"
Patersons Securities recently released an updated research report on the Company covering Q1 of 2011, available at www.sinogasenergy.com
About Sino Gas And Energy Holdings Limited :
Sino Gas & Energy Holdings Limited (ASX:SEH) is an Australian company focused on developing Chinese gas assets. The Company has operated in Beijing since 2005 and holds a portfolio of unconventional gas assets in China through Production Sharing Contracts (PSC's).
The PSC's are located in Shanxi province in the Ordos Basin and cover an area of over 3,700km2. The Ordos Basin is the second largest onshore oil and gas producing basin in China. The area has mature field developments with an established pipeline infrastructure to major markets. Rapid economic development is being experienced in the province in which Sino Gas's PSC's are located and natural gas is seen as a key component of clean energy supply in China.
On Sino Gas's Tuban prospect, 9 wells have been drilled, the latest being TB07 in November 2009. Extensive seismic and other subsurface studies have also been conducted. 4 wells have been fracced and tested with commercial flow rates achieved on the TB02 well, TB05 well and recently significant commercial rates on the TB07 well. 2.7 Tcf of Contingent and Prospective gas resources (100% mid case figures) have been independently verified on the Tuban Prospect.
The statements of resources in this Release have been independently determined to Society of Petroleum Engineers (SPE) Petroleum Resource Management Systems standards by internationally recognized oil and gas consultants RISC Pty Ltd. They are based on the Technical Report prepared by RISC Pty Ltd and included in full in the Company's Prospectus dated 29 July 2009. Quoted well flow rates are calculated at a tubing head pressure of 200psi.
Additional information on Sino Gas can be found at www.sinogasenergy.com
Contact:
Stephen Lyons
Managing Director
Sino Gas and Energy
Tel: +86-139-1148-1669
+86-10-6530-9260
Email: slyons@sinogasenergy.com
Gavin Harper
Chairman
Sino Gas & Energy
Email: gharper@sinogasenergy.com
http://www.sinogasenergy.com
Source:
Sino Gas And Energy Holdings Limited
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