6th May 2008 15:02
Green Dragon Gas Ltd06 May 2008 6 May 2008 GREEN DRAGON GAS LTD. ("Green Dragon" or the "Company") GDG PROGRESSES FROM EXPLORATION TO PRODUCTION Green Dragon Gas Ltd (AIM: GDG), the Chinese coal bed methane ("CBM") business,today announces an update on its continued success in developing its large coalbed methane resource across its five blocks in conjunction with itsjoint-venture partner. In accordance with Company strategy, wells drilled in2007 are being systematically put on production. Wells on production have met,and in some cases exceeded, Company expectations. BLOCK WELLS WELLS TOTAL WELLS ON TARGET WELLS DRILLED DRILLED WELLS PRODUCTION/ ONLINE 2Q08 2007 SO FAR 08 TO DATE DE-WATERING SHIZHUANG S 79 4 126 30 46 SHIZHUANG N 2 2 8 5 7 QINYUAN 1 3 10 5 10 FENGCHENG 5 3 18 10 16 PANXIE EAST 1 0 6 5 5 TOTAL WELLS 88 12 168 55 84 In the Shizhuang South block, GSS008 became the first successful Dymaxion CoalInseam well drilled in China and was put on production just over a month ago.The results have been very positive and the well continues to produce increasinggas volumes as the de-watering continues. While Mitchell Drilling's Dymaxionhorizontal wells have been very successful fueling the CBM development inAustralia, GSS008 is the first such well in China validating its application inChinese low permeable coal seams. Greka employees actively participated withdirectional drillers from Mitchell to achieve the successful drilling. Additionally in Shizhuang South, fracced wells have demonstrated gas productionearlier than anticipated demonstrating the success of the regional dewatering byother open hole completed producing wells. All the Shizhuang South block wellswill be produced into the existing Zaoyuan compressor station ensuring imminentpotential for gas sales. In the Shizhuang North and Qinyuan blocks the wells continue to de-water thecoal seam and fracc programmes are being designed into the 2008 work programme.Additionally in Qinyuan, a new pilot programme has been successfully drilledwith coal seams identified within the same profiles as the successful ShizhuangSouth block. The depth and thickness of this new pilot location willsubstantially expedite the drilling programme at Qinyuan. Fengcheng block wells were successfully fracced and all will be online thisquarter as planned. The wells that have been put online so far have demonstratedgas and water production that are in line with expectations. Finally, PanxieEast pilot wells were put online last week as planned. These wells are expectedto start de-watering as open hole completions and will be evaluated for fracturestimulations over the course of this year. Furthermore, the Company announces the appointment of Evolution Securities Ltdas its joint broker in addition to Smith & Williamson Corporate Finance Limited. Further to the announcement made in March 2008, regarding the potentialacquisition of Pacific Asia China Energy Inc. ("Pace"), the Company iscontinuing its due diligence on Pace and will notify any further progress in duecourse. The Company's Chairman and CEO, Mr. Randeep S. Grewal, commented, "Drilling, completion and production successes being demonstrated by the wellsbeing put on line are extremely rewarding for our hard working employees in thefield and this progress validates the Company's business model. We currentlyhave wells online in each of our five blocks and can already report activecasing head pressures in four of the blocks and gas production in two. I am verypleased to report such success in relatively short time frame". "Following over a decade of effort to develop a vertically integrated gascompany built on our vast CBM resource, this quarter is particularly exciting asit represents a turning point in the Company's history as we move from being anexploration to a production company. With gas production in hand, the rest ofthe integrated plan will be implemented expeditiously as the management hasworked on the other segments concurrently," concluded Mr. Grewal. For further information on the Company and its activities, please refer to thewebsite at www.greendragongas.com or contact: Randeep S. Grewal/Betty Cheung, Green Dragon Gas, +85237100168 Tim Thompson/Nick Melson, Investor Relations, Buchanan, +442074665000 Dr Azhic Basirov/David Jones, Nomad & Broker, Smith & Williamson, +442071314000 Tim Redfern, Broker, Evolution Securities, +447876030764 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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