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.
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