Sino Raise $100mn Debt for CBM Project
Australia-listed but China-focused unconventional hydrocarbon explorer Sino Gas and Energy Holdings has announced a new 5-year $100mn debt facility with Australian bank Macquarie to fund its Chinese coalbed methane (CBM) projects.
Sino Gas and Energy Holdings holds a 49% interest in Sino Gas and Energy (SGE), the operator of the Linxing and Sanjiaobei production sharing contracts (PSCs) in the Ordos Basin, China's largest gas producing basin. SGE’s interest in the Linxing PSC with CUCBM (a wholly-owned CNOOC company) is 70% and 49% for the Sanjiaobei PSC held with PCCBM (a PetroChina wholly-owned subsidiary).
The Macquarie facility includes a $68mn capital commitment that is expected to be drawn down over time to repay the existing Macquarie debt facility and fund project development, including exercise of the Linxing option. The remaining $32mn is available subject to Macquarie credit approvals.
“The new committed debt facility of $68mn, combined with cash on hand and projected SGE cash flow from operations is expected to be adequate to fully fund development of the Linxing and Sanjiaobei projects,” the company said October 30.
Sino meanwhile said that production in Q3 was below expectation at 13mn ft3/d, impacted mainly by lower than expected gas offtake nominations from the Chinalco plant downstream of Sanjiaobei. Owing to this, Sino has lowered the full year production guidance to 16-18mn ft3/d from 18-21mn ft3/d. The company expects to bring 15-20 additional pilot production wells in Q4 2017.
Revenue for the quarter was $6.1mn, up 320% year on year driven by gas demand growth of 26% year on year.
Shardul Sharma