Sino Oil & Gas Holding's CBM Profit Jumps

Sino Oil and Gas Holdings Limited reported an income of HK$18.4 million from its coal bed methane sales from the six months which ended June 30. This is a jump of more than five times compared with the corresponding period last year.

Profit stood at HK$6.418 million vis-à-vis a loss of HK$5.733 million during the same period last year.

Through its wholly-owned subsidiary Orion Energy International, the company entered into a production sharing contract (PSC) with PetroChina, its partner in China, for exploration, exploitation and production at a CBM field in the Sanjiao Block located in the Erdos Basin in Shanxi and Shaanxi Provinces. It has a 70% interest in the PSC.

In June this year, the National Development and Reform Commission issued a notice announcing that the natural gas city gate price for non-residential users will be adjusted effective from 10 July 2013 and the maximum increase per cubic meter should be no more than RMB0.4.

In line with the new adjustment of the gas price reform, the group and PetroChina jointly decided to adjust the CBM selling price of Sanjiao Block. Both parties agreed to increase the CBM wellhead price range for non-residential users by RMB0.3 to RMB0.4 per cubic meter.

The company believes the price adjustment will directly contribute to the CBM's margin and has an accelerating impact on Sanjiao's development, it said in a statement.