China New Energy Mining Completes Stake Buy in Sino Gas & Energy

China New Energy Mining Limited (CNEML) has completed the acquisition of a 51 percent interest in the unconventional hydrocarbon explorer Sino Gas & Energy Limited.

CNEML in April bought entire stake of MIE Holdings in two coal bed methane (CBM) assets in China for $220 million. MIE agreed to sell its subsidiary Asia Gas & Energy Ltd. which owns 51 percent equity in Sino Gas & Energy Ltd., which in turn has a 64.75 percent and 49 percent interest in the Linxing and Sanjiaobei production sharing contracts (PSCs) with China United Coal Bed Methane Corp. and China National Petroleum Corp, respectively.

MIE Holdings and Sino Gas & Energy Holdings Ltd were joint venture partners in Sino Gas & Energy Limited. Sino Gas & Energy Holdings Ltd on Thursday welcomed its new joint venture partner CNEML.  

Sino Gas & Energy Holdings Ltd said its management have met with CNEML on a number of occasions to ensure a smooth transition, discuss and agree key objectives for 2016 and obtain alignment on key strategic elements to deliver the full value of the Sanjiaobei and Linxing PSCs.

CNEML has confirmed its commitment to the short term objectives of increasing gross production from the Linxing and Sanjiaobei central gathering stations to 25 Million standard cubic feet per day (MMscf/d) and obtaining Chinese Reserve Report approvals by the end of 2016, Sino Gas & Energy Holdings said.

On an implied valuation basis, this transaction values Sino Gas & Energy Holdings’ 49 percent stake in Sino Gas & Energy Limited at about $211 million (A$282 million) before working capital adjustments.