Green Dragon Gas Signs Agreement With CUCBM for Five PSCs in China
Green Dragon Gas, one of the largest independent companies involved in the production and sale of CBM gas in China, has announced that it has entered into a binding agreement with China United Coalbed Methane Corporation (CUCBM), a subsidiary of China National Offshore Oil Corporation (CNOOC), regarding five of its Production Sharing Contracts (PSCs) in China.
Highlights of the agreement are:
- Interests of GDG and CUCBM now aligned with both companies to work together in order to maximise the value within the PSCs which continue in full force and effect
- Secures interest and revenue share of the approximately 1,600 wells drilled by CUCBM in line with PSCs
- CUCBM committed to invest a further $100 million into GSN in return for an additional 10% working interest (in addition to an estimated $100 million invested to date)
- CUCBM committed to ongoing cooperation with GDG with full information sharing across wells drilled on PSCs and all local assistance
- PSC exploration terms extended for a further 2 years
“This agreement substantially de-risks the Company's assets, paving the way for us to rapidly build on existing production and sales and to fully realise the market potential for our gas in China. The agreement also allows the Company to open a cooperative and positive chapter in relations with CNOOC and CUCBM. We now have a well-capitalised, supportive partner committed to developing our vast acreage and producing the substantial multi-TCF gas resource with us over the next 20 years. While our GSS block is already in commercial and profitable production, we expect GSN to follow shortly. GDG can now look forward to the continued successful execution of our business plan as the pioneering CBM developer in China,” Randeep S. Grewal, Founder and Chairman of Green Dragon Gas, commented.
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