Ann: Sino Gas - 2014 Work Program Underway , page-2

So drilling 59 wells then to quote


Testing teams arrived onsite in March and commenced frac testing in early April. Currently almost forty layers are expected to be tested as a part of the exploration program designed to complete the requirements for CRR submission. Sino Gas’ first horizontal well is planned to be tested in May to allow fraccing equipment to be fine- tuned initially on vertical wells after being held in storage during the winter break in operations.

You can understanding of this statement can be split into two ways

1, they have to test 40 layers to keep the Chinese happy

Or

2, they still don't know what layer is the best one to find flowing gas.

Then the last sentence is a bit confusing, I think he means that the horizontal well will be drilled into the layer that post fracting of the 40 layers show the best flow rates.

If my understanding is correct they really don't know even after many many wells where the producible gas is coming from.

That is extraordinary position to be in and gives me no comfort that the company has defined any npv positive reserves.