Green Dragon Gas Reports 2016 Loss

China-focused, UK-listed coalbed methane (CBM) explorer Green Dragon Gas slipped into loss for the calendar year 2016 due to its under-performing downstream business which it expects to divest shortly. The company reported a loss of $12.1mn compared with a profit of $0.1mn last year, it said April 27. Downstream business overshadowed the upstream business, which showed a profit of $16.5mn, resulting in an overall loss.

Revenue too was down to $29.1mn versus 37.7mn last year. This decline was due to an approximate 23% decrease in downstream sales and a 7% decline in the Chinese yuan/US$ exchange rate year on year.  Net gas sales increased by 5.6% to 3.41bn ft³ (9.3mn ft³/d).

Randeep S. Grewal, chairman of Green Dragon Gas (Credit: Green Dragon Gas)

The company said it will continue de-risking balance sheet and drive development programme and production cashflow.

“In 1H2017 we are focused on concluding the debt refinancing discussions with a number of options available to us, including mezzanine finance and reserve based financing. The company is currently evaluating the multiple term sheets on hand,” said Green Dragon Gas chairman Randeep S Grewal.

Grewal said on the Qinshui Basin Chengzhuang Cooperative CBM block (GCZ block), 2017 and 2018 will see significant activity with the recently approved overall development plan (ODP), approving the drilling of an additional 147 wells to complete the commercialization of the block. 

Shardul Sharma