Sino Gas & Energy Updates China Gas Reserves Estimates
Sino Gas & Energy Holdings Limited on Monday announced an increase in gas reserves at its China assets.
The evaluation was done by RISC Operations Pty Ltd (RISC), an Australian advisory, evaluation and valuation group.
“Following the completion of the 2014 work program, total project 2P Reserves have increased 51% (54% on a net basis) over the course of the year to 1,608 billion cubic feet (Bcf) (Sino Gas’ share 448 Bcf), up from 1,068 Bcf assessed by RISC as at 31 December 2013. Proven reserves (1P) increased 166% on a gross project basis to 1,238 Bcf (Sino Gas’ share 350 Bcf). The material increase in reserves was driven primarily by the inclusion of 36 new wells from the 2014 drilling program as well as 40 new production tests, with 2P reserves now accounting for 24% of total unrisked mid-case resource. As a result of the additional data, the reserves area has also expanded by 55%,” Sino Gas said in a statement.
The commencement of pilot production has enabled the first developed producing gross 2P reserves of 24 Bcf (Sino Gas share 8 bcf) to be booked against the blocks, attributable to the initial 16 wells connected to the Sanjiaobei central gathering station. Pilot Production has been stable since December 2014 with minimal downtime, producing on average 3.7mmscf/d (to 28 February 2015) and currently producing just over 4.0mmscf/d, with individual wells performing slightly better than expectations.
Total project 2C Contingent Resources declined 13% to 2,560 Bcf (Sino Gas’ share 739 Bcf), from 2,941 Bcf as of 31 December 2013, largely due to the maturation of contingent resources into reserves. 2P Reserves plus unrisked 2C Contingent resources has increased 4%. 2P reserves now make up 39% of unrisked mid-case discovered resources, up from 25% as of 31 December 2013.
RISC’s independent economic valuation of Sino Gas’ share of the project’s Expected Monetary Value (EMV) increased 36% to $3.1 billion from $2.3 billion2 . The EMV of reserves alone more than doubled to US$1.5 billion from $653 million, now accounting for 49% of Sino Gas’ total EMV, up from 29% in 2013.
The 2015 work program will build on the successes of 2014 with $90 million capital budget (gross) designed to bring the second central gathering station on line by mid-year and ramp up production from both facilities towards full capacity of 25 mmscf/d by year end.
Sino Gas is operator of the Linxing and Sanjiaobei Production Sharing Contracts (PSCs) in the Ordos Basin, Shanxi province.
The PSCs cover an area of approximately 3,000km2 . The Ordos Basin is the second largest onshore oil and gas producing basin in China. The region has mature field developments with an established pipeline infrastructure to major markets