Sino Gas and Energy (SEH) and MIE Holdings (1555 HK) have received approval for the 8th and 9th Modification agreement concerning the Sanjiaobei PSC.
ASX release attached.
* The approval ratifies the transfer of the PSC from Chevron China Energy and extends the exploration period on the PSC until August 2015.
* Provides further proof that the new management team has a strong working relationship with its PSC partners CNPC/Petrochina and the Chinese authorities
* Provides comfort that the Chinese regulatory body believes that the SJB PSC is an important asset to be exploited and places the company in a very favourable position to apply and receive approval of the Chinese Reserve Report to be submitted in 2013.
Project Economics as it stands:(Project area 40% explored) * 3.7tcf of Gross reserves and Resources, * Mid Case Project NPV: USD2.3bln (MIE USD1.2bln, SEH USD1.1bln) * SEH Valuation 26cps (risked) 43cps (unrisked)
Work Program on both the SJB and LX PSC's has accelerated in recent months. July- Sep 2012 Work Programs Started: - Sanjiaobei seismic program completed - 100km - Linxing seismic program completed -170km - Linxing East – 4 of 8 wells spudded
Oct: - Linxing East – 2 Wells reach depth. 10-12 coal seams c30-33m of coal seams in total. - Linxing East – Deployment of 2 additional rigs to accelerate drilling post initial results - Linxing East – An Exploration well west of development wells to be drilled post positive seismic results - Linxing West – 2013 Seismic program of 350km brought forward to be completed in 2012. - Linxing West – Deployment of two rigs for testing TB-11 and TB-12. - Sanjiaobei – Wells spudded after significant rain delays
News Flow from the company over the remainder of 2012 and 1Q2013.
Nov: - Site visit to Sanjiaobei
Remainder of 2012 and 1Q 2013 - Complete 2012 Work program - Announce test flow rates from wells drilled 2012 - Update independent Expert reserve report - Prepare CRR report for Submission 2Q.
